coming in each month. However, if you are like many artists, then you probably have an income that fluctuates as you pick up odd jobs here and there, such as landing a part in a film, commercial, or television show, or you may have a particularly great tip week waiting tables. Many of our clients will argue that there is no way to track accurately what their monthly income is. This is absolutely not true: it does, however, require a little footwork on your part. In order to determine your average monthly income you will need to calculate your earnings over the last six monthsThis article examines the second step of our Artists' Prosperity SystemTM, “Clear your financial clutter and get it organized for good!” There are several elements involved in truly getting financially organized. It can be easy to feel a sense of overwhelm which keeps us from moving forward. My goal with these articles is to guide you through each element of our system, there-by putting you in a significantly better place, so bear with me, go one step at a time and DON’T STOP!

Perhaps you are someone who has spent the time putting together a budget: you may even feel you try hard to work within that budget. Then why do you still have so little money every month? You should have some left over yet, when it is time for your next paycheck, you are counting the hours until you receive it so that you can go buy groceries. If this scenario sounds familiar, you are not alone.

So, how does this happen? Well, there are a few reasons. The first is that, while many of us have been taught that we should have them, the truth is that budgets rarely work. For most of us, budgets are exactly like diets. We begin them with the best of intentions, we might even stay committed for a short while, but eventually we slip back into our old eating habits (or in this case spending habits). This happens because the entire concept of a budget involves deprivation and human nature will simply not allow itself to feel deprived for very long. The other major factor is that, while your budget (if you have a budget) may account for your rent, bills, and groceries, what about that Starbucks coffee and muffin you buy every day? What about the parking you paid for last week? What about the birthday gift you bought for your best friend and the pair of earrings that you bought yourself because you wanted to treat yourself? There is certainly nothing wrong with any of these things. The problem lies in the fact that we often do not track these little expenses. “It’s only $5,” we say. The thing is, if you have 20 “it’s only $5” in a month, you have just spent $100 about which you didn’t even know. It all adds up and this type of “it’s only $5” spending can turn your finances into a nightmare.

In terms of earnings, if you are someone who has a full-time income, it is pretty straightforward to determine what is coming in each month. However, if you are like many artists, then you probably have an income that fluctuates as you pick up odd jobs here and there, such as landing a part in a film, commercial, or television show, or you may have a particularly great tip week waiting tables. Many of our clients will argue that there is no way to track accurately what their monthly income is. This is absolutely not true: it does, however, require a little footwork on your part. In order to determine your average monthly income you will need to calculate your earnings over the last six months.

try hard to work within that budget. Then why do you still have so little money every month? You should have some left over yet, when it is time for your next paycheck, you are counting the hours until you receive it so that you can go buy groceries. If this scenario sounds familiar, you are not alone.

So, how does this happen? Well, there are a few reasons. The first is that, while many of us have been taught that we should have them, the truth is that budgets rarely work. For most of us, budgets are exactly like diets. We begin them with the best of intentions, we might even stay committed for a short while, but eventually we slip back into our old eating habits (or in this case spending habits). This happens because the entire concept of a budget involves deprivation and human nature will simply not allow itself to feel deprived for very long. The other major factor is that, while your budget (if you have a budget) may account for your rent, bills, and groceries, what about that Starbucks coffee and muffin you buy every day? What about the parking you paid for last week? What about the birthday gift you bought for your best friend and the pair of earrings that you bought yourself because you wanted to treat yourself? There is certainly nothing wrong with any of these things. The problem lies in the fact that we often do not track these little expenses. “It’s only $5,” we say. The thing is, if you have 20 “it’s only $5” in a month, you have just spent $100 about which you didn’t even know. It all adds up and this type of “it’s only $5” spending can turn your finances into a nightmare.

In terms of earnings, if you are someone who has a full-time income, it is pretty straightforward to determine what is coming in each month. However, if you are like many artists, then you probably have an income that fluctuates as you pick up odd jobs here and there, such as landing a part in a film, commercial, or television show, or you may have a particularly great tip week waiting tables. Many of our clients will argue that there is no way to track accurately what their monthly income is. This is absolutely not true: it does, however, require a little footwork on your part. In order to determine your average monthly income you will need to calculate your earnings over the last six months

might even stay committed for a short while, but eventually we slip back into our old eating habits (or in this case spending habits). This happens because the entire concept of a budget involves deprivation and human nature will simply not allow itself to feel deprived for very long. The other major factor is that, while your budget (if you have a budget) may account for your rent, bills, and groceries, what about that Starbucks coffee and muffin you buy every day? What about the parking you paid for last week? What about the birthday gift you bought for your best friend and the pair of earrings that you bought yourself because you wanted to treat yourself? There is certainly nothing wrong with any of these things. The problem lies in the fact that we often do not track these little expenses. “It’s only $5,” we say. The thing is, if you have 20 “it’s only $5” in a month, you have just spent $100 about which you didn’t even know. It all adds up and this type of “it’s only $5” spending can turn your finances into a nightmare.

In terms of earnings, if you are someone who has a full-time income, it is pretty straightforward to determine what is coming in each month. However, if you are like many artists, then you probably have an income that fluctuates as you pick up odd jobs here and there, such as landing a part in a film, commercial, or television show, or you may have a particularly great tip week waiting tables. Many of our clients will argue that there is no way to track accurately what their monthly income is. This is absolutely not true: it does, however, require a little footwork on your part. In order to determine your average monthly income you will need to calculate your earnings over the last six months

the pair of earrings that you bought yourself because you wanted to treat yourself? There is certainly nothing wrong with any of these things. The problem lies in the fact that we often do not track these little expenses. “It’s only $5,” we say. The thing is, if you have 20 “it’s only $5” in a month, you have just spent $100 about which you didn’t even know. It all adds up and this type of “it’s only $5” spending can turn your finances into a nightmare.

In terms of earnings, if you are someone who has a full-time income, it is pretty straightforward to determine what is coming in each month. However, if you are like many artists, then you probably have an income that fluctuates as you pick up odd jobs here and there, such as landing a part in a film, commercial, or television show, or you may have a particularly great tip week waiting tables. Many of our clients will argue that there is no way to track accurately what their monthly income is. This is absolutely not true: it does, however, require a little footwork on your part. In order to determine your average monthly income you will need to calculate your earnings over the last six months

coming in each month. However, if you are like many artists, then you probably have an income that fluctuates as you pick up odd jobs here and there, such as landing a part in a film, commercial, or television show, or you may have a particularly great tip week waiting tables. Many of our clients will argue that there is no way to track accurately what their monthly income is. This is absolutely not true: it does, however, require a little footwork on your part. In order to determine your average monthly income you will need to calculate your earnings over the last six months. Virtually every person that takes the time to do this will find that earnings patterns emerge, and that they are able to determine an average figure of what they are earning each month. Having your accounts on Quicken will greatly help this process, as you can review earnings at the touch of a button. The next step is to do the same thing with expenses: go back through the last six months and average them out. If you do not have 6 months worth of receipts, average what you can, then religiously record every transaction (even if it is pennies). In a few months, you will have a true concept of your expenses.

Why is it so important to start tracking your earnings and expenses? The key to getting to your financial destination is to figure out from where you are starting. Sound confusing? Loral Langemeier, author of the new bestseller The Millionaire Maker, uses a great analogy: If we dropped you out of an airplane with a parachute and asked you to find your way to Kansas – you could absolutely do it IF you knew your exact starting point. If you had no idea where you were dropped – it’s pretty safe to say you could wander around for years and never find your way to Kansas. If you do not know your financial starting point, it is safe to say you will wander around your financial world for years and never find your way to either freedom or the goals you desire.

We encourage our students to stop focusing on trying to budget and first just get an extremely precise and specific estimation of exactly where your money goes each month. Start writing down every one of those “it’s only $5” expenses. Carry a little notebook with you and believe me it will become a habit to jot these expenses down quickly. We also want to make an offer to our readers. If you are serious about getting on top of your financial picture, send an e-mail to mailto:info@abundancebound.com and put in the subject line: “Chart of Expenses”. We will send you an extremely detailed list of possible expenses in an excel chart that will help you to remember all of the different ways you might currently be spending your money(You can also visit Abundance Bound for free help on any of this process). Completing this chart (it also has a place for you to track your income) wil