Manage your paycheck wisely: There are four things that you must do after getting paid. In today’s video, I’m gonna walk you through my payday routine. So, I’m gonna show you what I do. I’m gonna give you my secret sauce. This works for me. Copy what you like. If you disagree with something, then don’t do it. Or ask me about it in the comments down below. I am at your service. I am here to help. Now, let’s start with this. Let me know if you feel the same way. Maybe you do, maybe you don’t. Payday is a great day. You check your bank account, the direct deposit hits, the money’s there, and I know the feeling. It’s like, thank God I needed that money.
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But sadly, as the days go by, you watch your balance decrease, and you try to survive until the next payday. It’s stressful. I know how it is. But this can be fixed. So first, I’m going to do you this favour. I will not insult your intelligence. You already know the thing. You already know the thing. You already know the thing. You already know the things that you should be doing: putting away more money for retirement, investing your money, making your money work for you, building passive income streams, and having an emergency fund. You already know this. I know that you know. But the cost of living is outrageous. Everything is so expensive. All these one-time expenses keep popping up every month. It’s never-ending. So it isn’t easy to do all these things that you know you should be doing.
I get it. That’s okay. So let me share with you my payday routine, so you can see how I build wealth. And then I’m gonna give you some practical tips. Okay, so it’s payday. Money comes in. It hits my bank accounts. Now, a lot of these pompous rich people on social media love to say, ‘first thing you do is you pay yourself.’ I say bullshit. I have bills to pay. I don’t pay myself first. I pay my bills first. So, priority number one, at least for me, is to pay your bills. So your mortgage, rent, car payments, credit card bills, student loan payments, cell phone, utilities, etc. Get those paid first. Okay, so these rich people and their acolytes say that you have to pay yourself first to build wealth.
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They say that when you get your paycheck, the first thing you should do is set aside money to invest it. No exceptions. So, for example, if your net paycheck each month is, let’s say, $5,000, then the first thing you should do, according to them, is take $1,000 of that and put it into the stock market or go buy up real estate. Even if you end up not having enough money to pay your bills or your debt obligations, they’re saying that it doesn’t matter. No excuses. Pay yourself first and then figure out the math later. I disagree with this approach. I pay my bills first, and here’s why. Do you know what happens when you don’t pay your mortgage? You get foreclosed on, and they take your home.
Do you know what happens when you don’t pay your rent? You get evicted. Do you know what happens when you don’t pay your credit card balance? You pay an interest rate of 20% or more. The reality is that not everyone has the luxury of having enough money from each paycheck to save and invest. That is the truth. I don’t like it, but it’s just the way it is. However, again, this can be fixed. There is hope, and this must be fixed. So it’s not something that people can immediately correct with their next paycheck, which is unrealistic and it’s disingenuous, but you can do it, which we’ll get to. And here’s something that will help you. I guarantee it. And this is what I do routinely each month.
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I review my income and my expenses for the month. I take it on a month-by-month basis. I do this on a spreadsheet, Microsoft Excel; I highly recommend that you do this, too. I am telling you that this is a game changer. Okay, so when I do this, when you do this, your starting points will be your net paycheck. So that’s gonna be your take-home pay. So we’re talking about after taxes, how much money actually hits your accounts each month. And your take-home pay will be affected by your 401(k) contributions, your insurance, taxes withheld, et cetera, right? So, if that’s what you’re thinking, then you’re absolutely right; I agree with you. But for the sake of simplicity, please start with your monthly take-home pay.
So this is what I have to work with after taxes. From here, I pay my bills first. So list out your necessary expenses. So we’re talking about your mortgage, your rent, car payments, and student loan payments; write them down, please. Cell phone, internet, electricity, gas, groceries. So, I’m not talking about DoorDash, Uber Eats, or Starbucks; those are not necessities. Those are convenient, but they are not necessary. So listen, I trust that you can distinguish between needs and wants for this category. Now, I look at my spreadsheets, and I see how much money I have left over after necessities. From here, we move on to priority number two, which is setting aside money each month to invest. So I will take $500 a month.
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And send it to my brokerage accounts to invest in stocks or put it in my savings accounts and earn some interest. So, this is my ‘don’t touch’ money. I’m only using this money for investing or buying assets to increase my wealth. I will have this money in a separate brokerage account or savings account, no co-mingling. I will not mix this money with any other money simply because I want to stay organized. And it serves as a reminder, because they’re separate, that I’m seriously not gonna touch this money. This is for my financial safety and security. This is for my future. It’s for building wealth. So, I pick an amount to set aside each month, and I revise this monthly amount on an annual basis. My advice is don’t be too aggressive with this amount.
Make it something manageable for you because you’re gonna need money for the other things that we haven’t covered yet. So try to do at least something if you’re gonna start because something is better than nothing. If you have to start with $200 a month, then do it. If you have to start with just $50 a month, then do it. Again, better than nothing. So, make it a practical and realistic amount. Now, let’s move on to priority number three. After necessities and after investing, I set aside some money for something that I’m saving up for specifically. For example, I’m saving up for a car or it could be a down payment on a home, a vacation, a new cell phone, et cetera, or setting aside money to pay down your debts.
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I’m talking about your principal. So paying down debts on an auto loan, mortgage, student loans, credit card debt, et cetera. Now, here’s my advice is gonna be the same. Make this monthly amount that you’re gonna save or reduce your debt a realistic amount. Even if you have to start with a small amount, anything is gonna be better than nothing. Now, here’s my priority. Priority number four. With the remaining amount of money for the month, I say to myself, ‘This is how much money I can spend guilt-free for the month.’ My philosophy is that you have to live a little. Take care of your responsibilities, but you have to enjoy your life. At least I do. Spend it on fun, entertainment, convenience, go shopping, do whatever you want, go nuts.
And I’m not gonna feel bad because I’ve taken care of my priorities. I’m building wealth, and I’m being responsible. But listen, don’t get me wrong. I’m not trying to waste my money. Not even in this category. I’m still trying to spend my money wisely. Like if I’m gonna spend my money on having fun, then I’m gonna try to maximize, you know, how much fun I have for the dollars that I spend. And if I happen to have money left in this category, then maybe I’m gonna roll it over into next month for my wants, or maybe I’ll use that money to further pay down my debts, or maybe I’ll do it and use that money to invest it. You’re going to be free to do as you please.
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That’s how I see it. So those are the four things that I do after getting paid. So, number one, pay your bills. Number two, invest. Number three, save for something or pay down your debts. And number four, have a good time. Now I want to bring up what so many people are thinking: Brian, Brian, I don’t make enough money to do all these things. Okay, so I’m glad. I’m glad we’re bringing this up. So first of all, the reality is that for the majority of people, there’s not much money left over, if any at all, after all the essential expenses. The cost of living has inflated faster than wages. And there’s only so much in expenses that you can cut. Some people don’t even spend money on entertainment, alcohol, or designer clothes.
Or a fancy car and the math still doesn’t work out. If you’re in the situation, here are two pieces of advice. I hope this helps you out. So, number one, people are overly fixated on reducing expenses, and they neglect the other side of the equation. So what is the end goal? It’s to be in a surplus. More money is coming in than going out. So cutting expenses can only take you so far because, at a certain point, you’re going to have to make more money. So if you’re at a certain point, there’s going to be nothing left to cut. So just like how you’re mindful of cutting expenses and saving money like that. You need to also be mindful of how to make more money.
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So it’s going to be like in sports. You can’t just focus entirely on defence. You have to work on both defence and offence. There are going to be so many gurus on social media. They’ll lecture you about, oh, you should find a side hustle. Become a social media influencer, learn how to code, and donate money to support your community. Plasma, become a freelancer, try dog walking. Listen, I’m not going to regurgitate that crap. If you don’t want to do that stuff, I’m not going to make you feel bad about not doing it, okay? I’m sharing with you one piece of advice that is practical and will give you the best bang for your buck in terms of your efforts and reward. My advice to you is to find a higher-paying job and hear me out.
The best time to find a job is when you already have a job. So, find yourself an upgrade. That’s what I’m saying. So, when is the worst time to find a job? It’s when you’re unemployed because you will be desperate and you will settle. And that’s not a good look at your interview, now is it? Just think about it. If you already have a job, you have nothing to lose. You can look for a new job that offers better pay, flexibility, and benefits. And if you cannot secure a big upgrade, then screw it. You’re not going to settle because you already have a job. So you can walk into the interview, or the Zoom meeting relaxed and confident. And that’ll probably help your odds of getting that job.
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And what’s the worst that could happen? They don’t offer you a job? Well, the joke’s going to be on them because you already have a job. And if an employer offers you an upgrade, then take it. Drop your old employer like a bad habit. There is no loyalty when you are an employee. So you can be courteous, you can be professional, but there’s no loyalty. Your company will lay you off whenever it’s convenient for them. And you should leave when it’s convenient for you. Another way to play this is to take the new job offer and use that as leverage to get a pay raise at your current job. So you’re basically telling your current employer, I got a new job offer for 30%. More pay matches that, or else.
So you’re basically giving an ultimatum. So, with that being said, if you are employed, how proactive have you been about finding an upgrade to make more money? How much time have you spent looking at job postings, working with a recruiter, or networking? How current is your resume? How many jobs have you applied for last month? People spend more time casually looking at homes online or vacations to take, and they spend no time looking at job postings or sending out resumes when they have a job. So, you should be more proactive here. This is going to give you the best bang for your buck in terms of effort, time, and results. My piece of advice is to analyze your budget.
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So do the budgeting thing, write out your income and your expenses, and see where your biggest financial leaks are. So, trust me, this is going to be a game-changer. This is like a secret that you’ll stumble upon once you do this. It’s usually one category that is out of control. That is your money pits. It could be dining out, alcohol, drugs, entertainment, shopping sprees. Maybe it’s your dog. Maybe it’s your significant other. So, trust me, write down your expenses on a spreadsheet. You will see that it’s one category that is killing you, a black hole that sucks your money and much more than you thought. You’re going to be shocked at your spending in this category, the dollar figure.
And why am I saying that’s going to be one specific category in particular? It’s because it’s human nature. So, I want to share this observation with you. So let’s say that you’re a rich person. So I’m not talking about uber rich. I’m not talking about a billionaire. But let’s say that you have a person that makes $1 million a year. And I deal with these clients all the time. They’re a dime a dozen. So you’re going to notice that this millionaire is spending excessively in typically one or two categories in their life. So let me explain. A millionaire will not spend their money on the most expensive car, the most expensive watch, high-end designer apparel, the most lavish vacations, a mansion, or the most expensive tickets for sporting events.
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No, that’s not how it is. It’s usually just one or two categories where the spending is outrageous. So for example, I have a client that spends excessively on their watch collection. So my client wears a $100,000 watch but wears $60 jeans. So they can afford designer jeans, but they don’t care to. I have a client that has a car collection, and maintenance is very expensive. So, this client drives a Lamborghini. But eats at McDonald’s and Chick-fil-A every week. So they can afford to eat at a Michelin-star restaurant every single meal, but they don’t feel like it. They like Chick-fil-A. Chick-fil-A does not sponsor this video. I have a client that spends a ton of money on amazing vacations, just excessive amounts of money.
But he gets his hair cut for $20. So it doesn’t matter if you’re a millionaire if you make little money, or somewhere in between. You are overspending. In one or two categories and that is draining your money. And if you’re looking to fix your financial leaks, you have to first identify how bad the problem is. So if you think sometimes, I don’t know where my money is going, then you really have to write out your expenses. So, please investigate what is going on with your finances, and I want to see you make improvements. Now, if you want a free budgeting spreadsheet, please come to my website. So, I have a really good template for you. It’s free. No sign-up is necessary. You don’t have to submit any information. I want to help you out. Download it. I’m going to leave you a link down below. Please subscribe. I thank you for the support and I wish you a very nice day.
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