How many times have you heard that? Bottom line is that you need income to live. The manner of living is different for everyone but bottom line, it still takes money to fiance eating, housing, clothing, and other basic needs.
Let’s first find out if you presently are making enough money to fund a reasonable lifestyle. Again, we get into questions as to what is a reasonable life style? Studies have shown us that $75,000 a year presently can provide a suitable life style in today’s world that will provide security and less worry. I’m not sure if that is for only one person or covers a family. Kids in college and having a retirement plan doesn’t seem likely to be available with only $6,250 before taxes a month to spend. Do you buy the $75,000 idea? It doesn’t really matter for our analysis as we are going to be looking at you as an individual with certain needs.
So let’s go about this a old fashioned way. Get out your friendly bank statements (personal and business) and take a look at your expenditures. Look to the basics first. How much is the mortgage? How much for food? Day care? etc. Be brutal and honest about how much you spent on those items and more in the last 6 months. Now add how much debt you have and what the monthly payments are. Are you saving any money each month? Then using this information come up with a monthly budget of what you need to sustain your present lifestyle.