Freedom is a number.
It’s a number you design for yourself and a number you own. But before you can create your Freedom Number with confidence, let’s wrap our heads around another number: your Baseline Lifestyle Number.
What is the Baseline Lifestyle Number? Why is it one of the very first steps we take? And how will knowing your Baseline Lifestyle Number empower you on your journey to Financial Freedom?
You Are Not Your Business
You already have an advantage over most people. Unlike many working people, you’re a business owner. And that gives you far more control over your own financial destiny than the majority of your neighbors. With a well-structured business of your own making, you can ramp up your Freedom journey and accelerate past employees whose finances are largely out of their control.
But you’ve got an added temptation too. And that’s contamination. If that sounds dangerous, it’s because it is. Too often, business owners muddy what should be a clear and distinct line between their personal financial needs and those of their business. Reaching into your business accounts when your personal finances need a boost? Dipping into your own wallet to cover business expenses? Not paying yourself a consistent, livable salary?
You are not your business. And your business isn’t more important than you are. In fact, your business’ fundamental role is acting as a tool to cover your personal needs and help build your Freedom Generator.
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Your Minimum Monthly Needs
To secure your Financial Freedom, you have to know what you need from your business. What is the minimum (consistent!) income you need to pay yourself every single month to support your personal financial goals?
So let’s get personal. Let’s be clear. What we’re talking about are personal expenses. Right now, we’re not thinking about business expenses and certainly not a commingling of the two. The First Phase of Freedom, the Crystallize Phase, requires you to get crystal clear on precisely where you are in your journey and where you want to go.
Maybe you’re unhappy, or even ashamed, of where you are. That’s okay. Right now, we’re simply taking an honest look at your reality. In the Second Phase of Freedom, the Customize Phase, we’ll delve into tailoring a financial plan to your individual needs. But for now, we want to crystallize what your personal income must be. And we’re going to translate that goal into a clear number. We call this your Baseline Lifestyle Number.
Your Baseline Lifestyle Number
Simply put, your Baseline Lifestyle Number is the amount of money you spend each month on basic living expenses. It’s not how much you wish you spent as a better manager of your money. And it’s not how much you’d need to spend to live the Beyoncé lifestyle. It’s the number that supports what I like to call the “keeping-it-real” lifestyle!
Your Baseline Lifestyle Number covers needs like housing, transportation, shopping, education, health, travel, entertainment, debt and more. Nailing down every single one of your expenses can be a tricky business. In addition to memorable monthly expenses like housing costs and utility bills, you probably have a number of annual costs or occasional fees that easily slip your mind. Don’t worry. We walk you through exactly how to figure out your Baseline Lifestyle Number in Module One of Cash Flow Cure.
Have you figured out your Baseline Lifestyle Number? What did you learn as you went through the process? Share your experience with the Business Owner Only Community, and inspire someone who hasn’t started yet!
image credit: Bigstock/efetova
Makaylah Rogers is the co-founder of MindShift.money. She is a Thought Leader for her generation, teaching people how to rewrite their “money rules.” With an extensive background in wealth building and personal development, Makaylah’s path has taken her into executive roles in various fields including launching startups, real estate sales and motivational keynote speaking.