If you asked most people, they will tell you what the gross profit is. But is that the truth? Did they take into account how much taxes they pay? Do they take living expenses into account? Or how much money they spend the needless stuff? The answer is most people don’t. Most people go about their lives not knowing how much money they have. And why is that? I think the problem is it’s not being taught in school.
What can you do about that?
Basically, you need to start educating yourself. How much money is actually going to taxes, what your living expenses are, how much do you actually have. Seems like very basic stuff but you will be surprised how many people don’t really know. If they found out how much debt they have, I can only imagine it would scare them. We don’t take Credit card debt or Bank debt too seriously. Maybe because of the monthly returns, they are so low we don’t really take them seriously.
I read somewhere the credit card company’s main income is late fees. If I’m not mistaken it’s something around 78%. Imagine how much money the credit cards are making if after all our spending we still don’t get past the 22%. And with that 78% late fees, imagine how many people aren’t able to pay the credit card debt in time. This points at exactly what I’m talking about here, we don’t really know how much we owe.
What about how much we make?
Do you really know how much money you make? I don’t think so. When you ask the average person how much money they make, it will default to what they’re gross income is. Meaning they don’t take into account how much money they pay in taxes. Thinking the same when they spend the money. After the taxes taken out and the credit card’s hidden fees are deducted. The spend much more than they actually earn. Causing them to sink deeper into debt every month.
So what’s the answer?
You need to treat your life as though it was a small business. Calculating exactly how much money comes in and How much is spent. Only then can you really stop this cycle and start filling up the holes you created when you didn’t notice. You start by writing down every expense, you can do that on any computer, you can do that in the notepad it doesn’t really matter. Next, you need to Calculate what your expenses are. This includes your rent or mortgage, your bills, food and clothing and you’re spending habits.
Have both these lists in front of you at all times or at least when possible. So you can see what the difference is. This will force you to think how you can get your expenses down and increase your income. This is the main focus of this article, to show you the ugly truth and how to overcome it. It’s not going to be easy, but it’s not as scary as it sounds.
In time, you will get used to what your difference is. Hopefully, it will be a positive one, meaning you have money that you can spend. Remember when you’re confronted with that beautiful 60 inch TV, and you have free credit on your card. Take a breather, go home and run the math.
I hope you found this post helpful, if so like it and share it with your friends. And while you’re at it, check out my ebook ‘level up your business’ a guide to starting your own business the right way.