Living with Purpose on Purpose

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Live with Purpose

Living with purpose is something that everyone should strive to do. Most of us will spend our lives question the meaning of life. The reality is that the life we create for ourselves is the meaning of our lives. Living with purpose gives everyone an opportunity to make an impact. If you find a calling that is bigger than yourself, you have found the perfect life purpose. You have found a way to leave behind a legacy that no one can take away from you.

Life is too short to let it pass you by. As far as we know we only get one go around. That means that if you want to make a difference you only have one chance. Don’t live a passive life. Everyone should be able to find a way to make an impact. It doesn’t matter how small that impact is. Just taking the time out of your day to smile at 1 person could make all the difference in their life. Imagine what you can do once you have figured out your purpose in life!

4 Ways to Make a Difference

These 4 ways to make a difference are far from an all inclusive list. You may come up with a better way. What matters is that these 4 ways are a jumping point to creating a purposeful life. What makes these 4 ways fun is that you can use them in any way you want. They can be reverse for all I care. Just make sure you are putting in the effort to find your purpose, it is the most fulfilling thing you can do!

1) Find Something You Are Passionate About

The things you are passionate about are the easiest things to do. If you have a passion you can turn that energy into a positive influence for someone that needs help. That means if you like investing teach someone how to invest but if you are into working out try to find a partner to workout with. It doesn’t matter what your passion is as long as you use to help find your purpose.

2) Surround Yourself With Like Minded PeopleLike Minded

The people you spend the most time with are the people that influence you the most. If you want to find your purpose in life you need to spend time with like minded people. Your goal may be to help people, if it is then don’t spend time with people that are antisocial. If you help animals stay away from animal abusers. The people around you can make all the difference make sure they are on the same path as you.

3) Find and Create New Opportunities

When you are living with purpose opportunities will come to you. Jump on them if you can. The more involved you are the bigger difference you can make. If the opportunities aren’t coming figure out how to create them. The more opportunities you have the better your chances are of making a difference. Involvement and opportunities are the key, no one made a difference by mindlessly watching TV.

4) Don’t Live Passively

As I have mentioned before don’t live passively. It is impossible to live a purposeful life if you aren’t living life to the fullest. This is where surrounding yourself with good people, creating opportunities and finding a passion really matter. It’s impossible to live passively if you are already working towards making a difference. You have one chance to make a difference. Go out and share the things you love with people you want to be around. Give yourself a chance to live with purpose.

Take ActionTake Action

Living with purpose is about taking action. You have to find your purpose it doesn’t just happen, make finding your purpose a habit! You are going to use your passions and the people around you to create opportunities. Once you have the opportunities you will have to be active. Purpose doesn’t come to those who are passive. Even though you will need to make effort to find your purpose there is no rush. It is not a competition to see who is the most purposeful. 

Now it’s time to start your journey towards finding a purpose. It may start out as a smile or a wave. Eventually you will find your purpose. Once you have your purpose share it with others. Let others enjoy the passion that flows through you at every opportunity. Your purpose starts with you but ends with a legacy. Use that legacy to make a difference in the world!

Building Wealth With a Personal Budget

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Control Your Wealth With a Personal Budget

The secret to building wealth starts with a personal budget. Wealthy people know where their money is coming from and where it goes. That means if you want to start creating wealth you need to understand your own personal finances. Your personal finances start with a budget!

Now you may be wondering what is personal budget is. It’s really simple but sounds complex. Here it goes, a personal budget is an itemized list of expected income and expenses. See what I mean by it sounds complex. What that really means is that you record every source of income and expenses you have on a consistent basis, to make it easy lets use a monthly time frame. This is something that every wealthy person does (or should do) and it will help you grow your wealth.

Budgeting is Important

Now you can see that personal budgets are important because they let you see your personal financial health. When comparing your income to your expenses you want to see a positive number. That positive number lets you know that you are making more money than you spend. Knowing how much more you make will allow you to invest and grow that number even faster. On the other hand if the expenses are more than the income you’re in trouble and need to make changes as soon as possible.

So now you’re probably wondering “How do I get started?” and that’s where I come in. First we are going to look at just your income and expenses. Once that is figured out we’ll build out a plan to grow your wealth over time. And remember when it comes to wealth the old saying “Rome wasn’t built in a day” really comes into play. You want to let your money make money for you. The longer it works the more you get paid!

Understanding the Components of a Personal Budget

A set of gears that represents the components of a personal budget working together.

On the path to creating your budget you will need to understand three (almost four) things. They are very simple and easy to remember. First we are going to look at your income. This will be all of the money that you have coming in on a regular basis. Next we will take a look at your expenses. These will be split into two categories, fixed and variable. This is why it’s almost four things. The last thing we will look at is cash flow. Your cash flow is going to be the money extra money you have or the debt we are trying to avoid.

Before we move on, make sure you have a way to write this down. The best way to do this is by making 3 sections. One for Income, one for expenses, and one for cash flow. Split your expense section in half and label one half as fixed and one half as variable.

Income

Income is the first thing that you want to familiarize yourself with. You will want to write down every source of income you have. This can be anything from income from work to a side hustle or even investments. If you get regular payments write them down. Once you have written down all of your forms of income it’s time to look at expenses. Total them up at the bottom of the income section.

Expenses

Expenses are what you spend your money on. They are a little more complicated than expenses because there are two types. First we’ll take a look at fixed expenses and then we’ll look at variable expenses.  

Fixed

Fixed expenses are things you spend money on that you generally can’t change. This will include things like insurance, rent, utilities, mortgages, car payments, phone bills or any other bill that you are required to pay. Write down every single fixed expense that you have and total it at the bottom of the fixed section.

Variable

Variable expenses are the things that you spend your money on that you can change. This would be things like groceries, going out to eat, going to the movies, gas for weekend drives. Any expense in the variable section is something that you can easily control by choosing a cheaper option or living without. Write down all off theses expenses and total them up at the bottom of the variable section.

Before moving on to cash flow total up your expenses so you can have that number ready to go.

Cash flow

Cash flow is where you get to see how far your income goes each month. To calculate this take  your income and subtract your total expenses. This will give you your cash flow. This number will either be positive if you spend less than you make or it will be negative if you spend more than you make. Either option is fine for right now as we will work towards the highest positive number possible.

Now that you know how much cash flow you have and the main components of a budget it’s time to take a look at how budgeting will help you create wealth.

Creating Wealth with a Personal Budget

This is the point where you have enough understanding of the components of a budget to start creating yours and building wealth. There are going to be several steps to this process including reducing your expenses, investing your cash flow, creating more income, and tracking your net worth. All of these components are crucial if you want to generate wealth.

Reducing Expenses

Reducing your expenses is one of the best places to start creating wealth. There’s that old saying “a penny saved is a penny earned.” That a great way to look at things because every time you save money you are reducing the time you need to work to get to a certain net worth.

Now let’s take a look at look at those expenses I had you write down before. This is when the fixed vs variable expenses comes in handy.

Your fixed costs are hard to change. You may be able to refinance loans or reduce insurance by shopping around but that can be very time consuming but often very rewarding. It’s definitely worth seeing if you can reduce your fixed costs but know there’s no guarantee that it can happen.

On the other hand variable costs are much easier to reduce. Your variable costs are going to be things like how much you spend eating out, Starbucks, name brand foods, and clothes. These are things you can easily control. Do you have Starbucks on or restaurants on your expense list often? Start making an effort to brew your own coffee and cook meals at home. If it’s a convenience thing get a coffee pot with a timer or start meal prepping. Are clothes your big expense? You can be stylish and still shop on a budget. Start looking at thrift stores or shop less frequently. There is big money to be saved when you cut your expenses.

Think about this, if you spend $5 per day on coffee that’s $1825 per year. Spending $10 a day on lunch gets you to $3650 per year. That’s a lot of money that you could be investing in yourself. Now that you see the power of saving and cutting expenses let’s start to think about investing.

Investing

This is the step in the process where your money starts to work for you. There are a ton of different investment options out there. They can range from real estate to stocks to vintage cars and everything in between.

Investing is a very personal thing. I can’t tell you exactly how to invest your money. I personally prefer real estate, stock, and note investing. These methods aren’t for everyone. It is best to spend time learning about investing in general before you start throwing your money around. You may not like rental properties because you don’t find being a landlord appealing however you may enjoy flipping properties. You won’t know until you get educated!

Some of the best ways to grow your investments is within retirement accounts. You’ve probably heard of 401k’s or IRA’s. These are tax sheltered accounts that help your investments grow faster. These are highly recommended because of tax advantages. This is definitely a topic to talk to an accountant about.

Remember that investing is where your money can grow exponentially. It works for you but sometimes you need to make more income.

Increasing Income

Having a higher income is great for generating wealth. If your income goes up but your expenses stay the same you suddenly have more money to invest. More money to invest means more money working for you.

There are a few ways to increase your income. You’ll have to decide what is best for you before you pick any of these methods.

  • Ask for a raise at work. Many people go a long time without asking for a raise. They wait until they are offered a raise and miss out on higher income. Before you ask, make sure you have a good reason that explains why you are worth more to the company. Show them performance records or that you have been educated. Be prepared to negotiate!
  • Look for a new job. It is possible that you are overqualified for the position you are in now. If that’s the case, there are going to be many companies looking for people like you to work for them. Look around and see if you are being paid a fair wage at the same time look for open positions!
  • Take on a side hustle. Side hustles can range from entrepreneurship like starting a business to getting a second job. If you think you have some extra time after your normal job to make some extra money do it!

Of course this isn’t a comprehensive list of all the options out there to make more money. These are just a few ideas that will help you brainstorm options. That extra income is going to make your net worth skyrocket so don’t wait until an opportunity comes. Create the opportunity!

Tracking Net Worth

A representation of net worth growth.

Tracking your net worth is where all of the numbers come together. This is where you see how the wealth building. Your net worth is the money left over after you subtract your debts. The higher your net worth the wealthier you are.

To find your net worth add up all of your assets. These are things you own like houses, cars, investments, and cash. Once you have this number it’s time to subtract your debts. Your debts are going to be mortgages, auto loans, student loans, credit cards, or any other form of debt you have.

Wrapping Things Up

Do you like the number you are seeing? If you go through all of the steps over time you will start to love this number. What’s even better than your number now is your number in the future. As your investments grow and you create more cash flow this number will grow exponentially. Eventually you will be able to enjoy life without worrying about if you can make your next payment.

Now you can see how important it is to have an understanding of where your money goes. It is all too easy to skip tracking your expenses and spend all of your money. What you really want to do is get those dollars working for you. The more money you invest the faster it grows. Keep track of where your money goes and you will see why a personal budget is crucial on your journey to becoming wealth!

If this guide short helped you be sure to share it with your loved ones! One of the best gifts you can provide is education. Let’s build a community that loves personal finance and self development! Don’t forget to subscribe to our newsletter to get the most recent updates! And if you have a chance to leave a comment to tell us if budgeting has helped you!