Whether you’re a Hip Hop Star, Hip Hop Lover, or an all over music lover like myself the message is clear; let your money flow like water or Cristal or Courvoisier depending on your libation preferences. I’ve always been partial to Jack Daniels Single Barrell myself. As both a CFP® and a Rocker Chick these messages can be so conflicting.
So, let’s get to the crux (or horcrux) of the situation. The answer to both the Rock Star Lifestyle and not going broke is the unassuming, always hated and not at all overrated BUDGET! Wait, don’t leave, stay with me-Budgeting doesn’t suck I promise! And you know it will be awesome because I used an “!” at the end of the previous sentence.
When we think about budgeting, we think of scrimping and going without. Nonsense. When you go to work every day, you give up your time; time you could spend doing something fun. Time spent at work is time you will never get back, time that you expended earning that paycheck. Therefore, start seeing the true value of your money. Time is money, but the reverse is also true.
Now think of all the frivolous shit you spend your money on. A $5 coffee could have just cost your 15-30 mins of your life, depending on how much your make an hour.
We all work, not because we like our bosses (shut your mouth) but because we need the money. We all want the money so we can do stuff we love, stuff we enjoy. These things could include; travel, philanthropy, concert tickets and that sexy ass car.
After realizing that every dollar represents your time then you start being observant of how and where you are spending it. If you want to travel to an exotic place, maybe that $5 cup of coffee isn’t that important. Making your budget reflect your financial goals and dreams, makes budgeting less crappy.
Budgets are flexible, where you spend your money every month can and will change even though your total monthly budget stays the same. What? Example please. Let’s say you earn $2,000.00 per month, then your budget should be based on $2,000.00 per month. If one month you have more flexibility in your bills than take some of that money and splurge on front row tics to your favorite band. Will you have to skip some of your $5.00 coffees that month to accommodate the ticket price? Maybe, but tell me the front row concert experience wouldn’t be worth it!
Do you see what you just did there? YOU selected what your time was worth. The dollars you earned paid off in an amazing experience vs. just a caffeine fix.
Now to throw a disclaimer on this, you should be putting money into savings each month. Savings rule of thumb is to shoot for 10% of your income monthly. And people, once it goes into savings it STAYS there. You get it? Savings is not true savings unless you only utilize it in the case of an emergency or to fulfill one of your financial goals. Using your savings as parking lot for money for a week or two doesn’t count. Sorry.
Also paying your bills every month and spending the rest does NOT count as budgeting-that is just paying your bills.
Bottom-line- You want to live like a Rock Star, you got to do one of the nerdiest things possible-BUDGET. By proper management of your money you are in control of your experiences and things that make you happy.
In later Blog Posts, I will be discussing the difference between ROTH IRAs and IRAs and which you should do, but that day is not today.
If you need help defining your goals, budgeting or just want to tell me how great I am, please email me at email@example.com or follow me on Twitter @melrocksmoney.