The 20/30/50 Rule for Money Management
Imagine living in a world where money was non-existent and everyone could just do what they loved no matter what. What would you do?
I know what I'd do - I'd probably spend a few months traveling the world and seeing all kinds of cool places, enjoying great food, and meeting cool people.
I'd then turn my attention to film directing and possibly look into shooting an awesome horror film I wrote years ago called Footsteps.
What would you do? Take a moment and think, and write your answer down.
Keep your answer in mind for when your acting career really starts taking off!
Now unfortunately, the nature of the world would make it completely impossible for money not to exist.
Why? Because most people wouldn't want to serve others for free.
For instance - me wanting to travel the world... what kind of pilot would fly back and forth every day without being paid?
And wanting to try all those delicious foods around the world? Who would be willing to make them if they're not being paid?
The truth of the matter is that most things would fall apart if money weren't involved!
So that's why I want to talk a bit about money management today. I'd like to introduce you to what I call The 20/30/50 Rule. Here's how it works:
First, I’m going to assume you already have some sort of part-time or full-time job that earns you a specific amount of income each month.
Now you need to figure out how much money you make each month on average. Even if it changes, find your baseline income. Let’s pretend you have a part-time job that earns about $1,500 a month and you also make at least $300 per month from acting.
This means you bring in $1,800 per month on average.
Now, take that $1,800 and subtract your monthly required living expenses. Let’s say you have $700 rent each month, and then another $700 in utilities, food, etc.
If we subtract your monthly costs, $1,800 minus $700 minus $700 equals $400 left over.
Take that $400 and divide it up into percentages, 20%, 30%, and 50%.
Take this money and put it into separate accounts or sub-accounts (or just keep track of the totals) so you know how much you can spend (you can use apps or bank account automations for this, just Google it).
Try not to spend it each month unless you absolutely have to - the goal is that you save it up over time so you eventually have plenty of money lying around when you need it.
If you strictly follow this for a year or two, not only will you have plenty of money to further your career, have fun, and have a safety net for slower times, but you’ll also have built a savings mindset that will help you greatly in the long run!
After just one year? You'd have $960 in Savings, $1,440 for Fun Money, and $2,400 for your Acting Career.
And if you kept going for 5 years? $4,800 in Savings, $7,200 in Fun Money, and $12,000 for your Acting Career.
Are you motivated to save yet? You should be. And those numbers could be way bigger if you continue working on increasing your income each month.
And even if you don't think you have enough to save, just start with $20 each month and split it up ($4 Savings, $6 Fun Money, and $10 Career). After a few months of doing this consistently you'll feel motivated to start saving more!
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