How to Manage Your Money So You Never Go Broke

Get out of the paycheck to paycheck life with this simple money management formula!

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00:00 Start Here
01:15 Understand Exactly Why People Are Living Paycheck to Paycheck
03:06 Adopt A Frugal Mindset
04:51 Begin Establishing The Emergency Fund
07:05 Begin Getting Your Money To Work For You
10:14 Get Creative And Continue Expanding

In this video, I explain a five step plan to manage your money in a way where you will never have to worry about running out of money.

1. Understand Exactly Why People Are Living Paycheck to Paycheck

The reason that majority of people are living paycheck to paycheck is not necessarily that they aren't making enough money, but it's because they are managing their money in an unsustainable way. They simply make money and then spend money, which makes then 100% dependent on a paycheck, and if the paycheck stops coming in, then they have no money to fund their lives. In order to break out of the paycheck to paycheck life, you must break away from this unsustainable financial plan.

2. Adopt A Frugal Mindset

Once you understand why people are living paycheck to paycheck, the next step is to adopt a frugal mindset. It is important to remember that being frugal is managing your money in a way where you are not wasting anything nor depriving yourself. The average person could save hundreds of dollars each month if they just cut out their wasteful spending. When you focus on cutting out wasteful spending, you will probably have some money left over before you receive your next paycheck. Being frugal alone will not solve your financial problems, but it will allow you to have more money left over instead of wasting so much.

3. Begin Establishing The Emergency Fund

Now that you have adopted frugal habits, the next step you take is establishing the emergency fund. To do this, you must "pay yourself first," which means once you get paid, before you start paying your bills, you take out a specific amount of money that you can afford and put it in a savings account for emergencies. It is important to not use this money unless there is an emergency. Ideally, you should build this up until you have six to twelve months of living expenses. Once you complete your emergency fund, you are no longer 100% dependent on a paycheck because you have the emergency fund to rely on.

4. Begin Getting Your Money To Work For You

Once you complete your emergency fund with six to twelve months of living expenses, you no longer need to put money into it due to inflation. Instead, you should focus on investing the money in the stock market in order to outpace inflation and maybe make a little extra money on top of that. Putting your money in the stock market by investing in low cost index funds is a source of passive income, which is money you are making without doing any work. By doing this, you are now putting your money to work and it is making you money, so in addition to the emergency fund you now have the investments starting to make you money.

5. Get Creative And Continue Expanding

Finally, once you have established your emergency fund and have began investing, you are no longer extremely dependent on a paycheck. You can start to explore other avenues of making money in your life because you are not desperate for a paycheck anymore. In order to create new streams of revenue, you must be creative and think outside the box. Some options are continue investing, start a side hustle, or start a business. Once you start adding new streams of revenue, you are not as dependent on your paycheck coming in and have developed a much more sustainable financial plan.

**This video is intended for entertainment purposes only, none of it should be interpreted as financial advice. Links above are affiliate links where if you click and order, I will receive a commission at no cost to you. **

[ElAgustin]

What are your creative ideas to make money outside a normal paycheck?

[CliveBirse]

The advice in this video is valuable for the typical American. I started investing when I was 30 back in 1998. Today, I have a decent $3.7M nest egg, thanks to the careful supervision of my CFP. After learning all of this, my only regret is not starting earlier when I was 25. It may not seem like much but those extra 5 years are the most important.

[chriswalter]

I learnt to manage my money through investments and it really works for me. They say money can't buy happiness but poverty can't buy anything.!

[harrisonmccoy]

It is the appropriate use of an organization’s financial resources, such as making investment decisions and employing cash management strategies to maximize profits and cut risk.

[nicoleanagnostou]

Today I made my first deposit towards my emergency fund :)

[moonshynegirl]

At 60, I wish someone had talked to me about money years ago! I will make sure my granddaughter knows these things!

[waynenakanishi]

Hi Austin, I am 26 years old and I am just first month in of my first job in my life. I am so fortunate to discover your channel! Muchas gracias!

[RebeccaGilpin]

When you venture into the world of financial investment, it's important to understand some foundational principles

[lynn]

Savings, stocks, and a side hustle. Got it!

[roceliamonte]

I love how the angel music comes in everytime you say emergency fund. 😂 Love your videos Austin! You're always a great help to us. Thank you!

[Clarkfamilyorchards]

Live below your means in your twenties so you can live much more comfortably in your thirties and basically the rest of your life. I lived in a single wide mobile home for 7-8 years, paid it off in 3, made enough for a nice down payment on a very nice new construction property and I keep the same frugal mindset that I had then. Having kids is the most rewarding and yet one of the most challenging things one will ever do, but it is true, you will want to live below your means mostly before the kids come into the picture. I wouldn’t want my kids to remember growing up in a very small space in a not so great area, so I sacrificed my twenties so that I could afford where I live now. Another hack is to overpay your mortgage and you’ll be surprised how many years yes years will melt off of that mortgage. 👍🏻

[bellatrixmedina]

I will watch this over and over again until it’s cemented in my brains! 🎉💯💯💯

[AbidingHopeMentalHealthCoach]

I currently have an emergency fund, six months fully funded. I also have an auto repair and maintenance fund. When I popped a tire for the first time ever in my life last week, my biggest concern was not how I was going to pay for it, because I already knew how I was gonna pay for it. I was only concerned about getting my Uber riders to their destinations, since obviously, I wasn’t meant to be the one to take them. I found a shop that had my size tire, and was back on the road making money in short order. And I was even frugal, by opting for used tires instead of new ones.

[timothyswauger]

Some people have a spending addiction that they can’t control. Before putting any of these practices to work, they’ll have to get help for that.

[tamihill]

Thank you austin. I almost payoff my cc debt my your advice i have 520.00 left to go i rent a room from a friend

[carlosbcn]

Besides handsome you are intelligent and wise

[mooshway]

In response to other commentators, marriage CAN be great. My husband and I both work, have similar incomes and very similar financial mindsets. Expenses are shared.
Kids on the other hand....😅

[sarahsolomon]

Austin, you are a hidden rare gem amongst YouTube! I just found your channel a couple of days ago and Ive watched a few of your videos. I really love your content! I’m already a pretty frugal person but i still enjoy listening and learning from you. You are a very wise young man! Thank you so much for this video! ❤

[andersonelerilopesdelima]

I’m little older than you, but I feel that I have so many things to learn from your videos. I’m so grateful that I discovered your channel! Hello from Brazil

[TeaLightCooking]

3:12 Agustin keep on preaching - I keep on listening because not only is your advice good but it's also helpful and very thoughtfully presented 😊