consulting tip

Break Down Your Income & Expenses

Credit for this one goes to user GeekLimit on Reddit – one of my favorite personal finance tips! This is an odd little trick that can change the perspective you have about your money, and help you budget better. It's all about breaking your income and expenses down into daily values, like this:

  • You make $2,500/month = ~$83/day.
  • You pay $800/month for rent = ~$27/day.
  • You pay $200/month for car insurance = ~$7/day
  • Everything else (food, phone, gas, etc.) comes to $750/month = ~$25/day That means you're left with $24/day in spending money. Want to save $1,000 for a nice vacation? You'll have to save about 42 days worth of your spending money. That means 42 days of not spending a dime. Want to buy a new $10,000 car? That's about 416 days worth of your spending money. This will help you see how far purchases are going to set you back and affect your spending ability.