![]() ![]() If you’re keeping track, 20% of your income is left over after paying for your wants and needs. It’s discretionary money, variable money. No, you’ll go buy some rice and beans and boil them in a crockpot and thank Jesus for the food. You may not eat out at fancy restaurants anymore. However, if the economy crashes, you probably aren’t going to take family vacations. However, you may start buying cheaper food and less expensive clothing. If the economy crashes, you still need to have a place to live. Your needs are the things you have to pay come hell or high water. You need to make sure that you don’t place your wants in the needs category. These are things like entertainment, vacations, restaurants, events, and “toys.” Again, if you’re making $100,000, then you can put $30,000 toward your wants. Next, 30% of your take-home pay should go to your wants. Therefore, if you’re making $100,000, that means that $50,000 should go to your needs. Whether you call these things “fixed expenses” or “non-discretionary expenses”, your needs are things like housing, food, clothes, transportation, medical, and minimum debt payments. Your Needsįirst of all, 50% of your net income (the amount of money you deposit into your personal account) should go towards your needs. An ideal budget exists, but what is it? What is the dream budget for your personal life? Well, let’s break it down into percentages to help you identify your dream budget. However you do it, you need to identify how much money you are spending each month or how much money you should be spending each month. ![]() Maybe you use budgeting software from a company like Mint or QuickBooks. To determine how much you should pay yourself from your business, you need to build a dream budget for your personal life. So, let’s walk through the process of building your personal budget. In reality, if you can dictate where all of your different monies flow, then you can gain financial freedom. Budgets don’t have to be something negative. Your personal budget dictates how much money you should pay yourself from your business. ![]() You see the question of how much you should pay yourself boils down to two simple words – personal budget. You can actually control your personal financial life as a business owner. ![]() You simply take the spoils.īut friends, there’s a better way. Inevitably, you end up going to work, busting it, producing revenue, paying bills through the company, and taking whatever’s left at the end of the day, week, month, or year. Yet, many times, business owners don’t think about how much to pay themselves. Two Simple Words Determine How Much to Pay YourselfĪs you know, I spent my last blog series dealing with growing your business and adding maximum value to it. 01:10 – How Do I Determine How Much to Pay Myself?.Podcast Time Index for “How Do I Determine How Much to Pay Myself?” Today’s topic is how much should you pay yourself as a small business owner. This single area – this one single thing – will make or break your financial future. In this post, I’m going to tackle one of the most difficult areas of financial planning. Personal Finance for Business Owner Podcast Index.Your Baby’s Ugly – Growing Business Value.Personal Finance for Business Owners Series. ![]()
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