 Hey everyone and welcome to Norris Cove. I'm Yoshida. Today, you guys, we're going to be doing five tips of how to start a budget if you're self-employed. Now, here is my disclaimer. I am not a financial advisor. These are just some tips that I've used in the past to get a budget going for myself and start it. So if that is something that you would be interested in, please do me a favor. Stay tuned and also hit that subscribe button. Let's get into it. Tip number one. Tip number one is to start tracking your spending. Start writing every day what you're spending your money on. If you get a coffee, write it down. If you buy a pen, write it down. If you're a planner like me and you buy some planning supplies, write it down. Here's another tip inside of this one tip is to highlight. Use color coding on your spending. That way that you'll have a bird's eye view of what the majority of your money is going, where you're spending it at the most. That is a game changer. I mean really. Highlighting was something that I did start to do in my budgeting of what I was spending and it became a game changer for me. Tip number two. Track your income. As self-employed people sometimes we may get paid on a daily basis, weekly basis. We may receive tips and so on and so forth. But you want to start writing down what you are making. If you're getting paid on a day-to-day basis, you would want to start tracking your income on an everyday basis. If you're getting paid on a weekly basis, you want to start tracking your income on a weekly basis, monthly basis, etc. I highly suggest start to track your income on a weekly basis. Just do this for a couple of weeks or a couple of months and that way you'll have an ideal of what you are bringing in income-wise. So with step number one and tip number one and tip number two, you have been tracking your spending. You have been tracking your income for a couple of weeks, a couple of months, however. And now you should have an average of what you're spending your money on. Also what your income, what's the average of your income. Now also kind of going back to tip number one, once you start to see what you're spending your money on and you're starting to track that, you'll start to make note of what you're spending the most money on. You'll also kind of rear back on spending that money on that because now you really have that bird's eye view and you can see where your money is going. Now, step number three, you're going to start to write out your monthly bills. This way you can use a notebook. It doesn't have to be fancy. You can use a calendar, but you want to start writing down your monthly bills, their due dates, when they're due. If you're a digital planner, you can actually use your Google Calendar, iCal or whatever and put it in there. I do put my bills into my Google Calendar just for alerts. So just in case if I forgot to write it down, my calendar gives me an alert. I do highly suggest putting alerts into your digital calendar. That way you'll get an alert. Put it a week ahead of time. Put it a day or two ahead of time so that you still have these constant reminders of your bills to do. Tip number four, start budgeting. What you're going to do, don't worry about it being on a monthly basis or that it's not the first of the month. You're going to start to budget weekly. I suggest start a budget at the beginning of the week. If your week typically starts on a Monday, I would start my budget on Monday right out from Monday to the next Monday of what you have to pay. Write down what do you owe for that week. Also write down what your projected income is for the week. Again, you're going to write out your projected bills, your projected income. This way you can see when, where and what your money is going to and where your income is coming from and where your income is going. Seeing what you owe for the week will trigger your mind to not overspend, concentrate on paying those bills and your mind will just automatically say, hey, I have these bills to pay this week. I can't overspend. My money needs to be allocated to X, Y and Z bills. Another many tip in this tip number four is to cross your bills out as you pay them. This gives the bank, the brain an accomplishment feeling. You start to feel accomplished that you have paid these bills. You've crossed them off your list. We all want to feel like we've accomplished something. And this is a great way to do that. Now also here in tip number three, after you've paid your bills, if there is money left, and you're going to pay those bills as you cross them out. If you have money left, what you're going to do is you're going to put that into a savings account. We're going to get more into about the savings account and tip number four and five. But you want to put that into a savings account or put it somewhere that you're not going to touch it. I've mentioned this before, give it to a friend, a family member or someone, you know, who's not going to touch it, but we'll get more into the savings account later. But that is definitely going to go to debt. Now that you've become comfortable budgeting on a weekly basis, now you're ready to start budgeting on a monthly basis. So let's get into tip number four. Cash envelopes and sinking funds. Here where it gets exciting because now that you've been budgeting for a on a weekly basis and a monthly basis, now you're noticing where your money is coming from, where it's coming in from and where it's going out to. Now with that extra that we talked about in tip number three, that extra now can be allocated to some things that you have long term goals for. So something that you want to save for a long term, you might want to put that in a sinking fund. Now for things that you pay on an every week basis such as your gas, you're going to look back to when you're budgeting on a weekly basis and you notice that you were spending, let's say $160 for gas in the month. Now what you're going to do is put that into cash envelopes and set it aside. Again, so things that are long term that you want to save for, let's say a house that would go into a sinking fund. You can set that up in a bank account or you can do envelopes, cash envelopes for that as well. Now things that you pay for more so on a weekly basis or bi-weekly basis such as groceries, you're going to put that into cash envelopes and you don't have to do cash envelopes. Again, you can do this digitally through your bank, but you want to put those things aside. Now, again, you have a bird's eye view of what you've been spending on groceries. So now you have an idea of what it will cost you on a monthly basis to get groceries. So let's say, for example, you were spending $160 on gas for the month. Now you would take that $160 divided by four and now that shows that you've been paying $40 a week. So now you'll be putting $40 a week into your cash envelopes for your gas. And another example, let's say that you've been spending $225 roughly on groceries just for the month. This is hypothetically and now you want to take that $225 and you want to divide that by four. And once you divide that by four, you'll see that you have been spending $56.25 roughly a week on groceries. So now you would take that $56.25 and you will set that aside out of your budget and you would do it on a weekly basis. Again, you can do it monthly and you could do it either digitally or in a cash envelope setting. Tip number five, calculate your debt. This is the last step that I've used in getting started with the budget. You want to calculate your debt. You want to see how much debt you're in. You want to go through, you can use credit karma, it's free. Or if you get your bills still delivered through mail, you can go through your mail. Look at your ending balances. You want to go through that and you want to start to write all of these bills down, add it up. It's good to look at it because a lot of times we don't want to look at what we owe. But in order to conquer that debt, we have to look at it. We have to look at how much debt we're in. Then we'll start to solve the problem of how to get out of that debt. Now with your debt, you can also do that same formula that we use for groceries, for cash envelopes and sinking funds. You can add up how much debt you've been paying a month. Let's say you have credit card debt and you're noticing that you're paying roughly $300 in credit cards. This is just a random number. You want to divide that by four again. And then you can do that weekly or when it's due, you can just make sure that you have the money in your account to pay that debt that you owe. And then once extra, again, you will be throwing that at your debt. Or you can make envelopes just for debt and you can throw that at your debt. Now we're going to get a little bit into this. This is still step number five. We're going to get a little bit into debt snowball and avalanche debt and how to pay that. This is just an extra tip and because this is our last step in getting comfortable with starting a budget. Once you look at your debt, you got this big number and you can see what you're using for debt or what you owe in debt. You're going to look at what you owe in debt. You're going to take that number and you're going to take all of the list of things that you've accumulated in debt. Debt snowball. It's a very popular way to pay off your debt. But what you're going to do with the debt snowball is you're going to pay the smallest credit card or smallest debt off first until you get to the biggest one. And you're going to throw everything at that smallest one. Then you're going to go into the next one that's the smallest until they're paid off. Now another way to pay your debt off is the avalanche method. What you're going to do is take the debt with the highest interest rate and you're going to start with that one first and give it everything extra. You're going to throw at that until you get down to your smallest one with the smallest amount of interest rate. So that is just some key points. I wanted to give you guys inside of that number five tip because eventually you're going to have to look at that debt. You're going to have to look at that number. It will be scary at first. But once you start to develop a budget, you'll see that it is feasible that you'll be able to pay that debt off. Once you start to pay your things on time, you'll start to realize that you do have money. You'll have money that you didn't know that you had. So I have some more tips I like to share. I will put that in another video for another time, but I just wanted to give you guys the basics. Again, I am not a financial advisor. These are just some tips that I use in the past to pay off debt, get out of debt and raise my credit score. So if you enjoyed today's video and you would love to see more content like this for myself, do me a favor. Hit that subscribe button. Don't forget hit that notification bell and I will see you in my next video. Bye.