How To Budget For Lifestyle On Any Income (Part 1)

Hey everyone, it’s Annie Margarita yang and
today’s video is a request from Kent Yang. And he wanted me to make a video on
how to budget for your lifestyle, so today I will go over exactly that: how
to budget for a lifestyle on any income. So I don’t care how much you make. You
can make a lot of money. You could make a six-figure income even a million
dollars a year. Or you can make minimum wage… full-time, part-time, doesn’t even
matter. As long as you have just a little bit of money left over after you pay all
your necessities and your bills. As long as you have even something like $100 for
the entire month for lifestyle, then you can begin to create the lifestyle that
you want. I’m not going to promise anything extravagant or luxurious–things
that you would see in a magazine. I’m not promising that kind of lifestyle because
everyone has a different income. But what I can promise in this video, is a
lifestyle that you would be happy with, one that you can feel content and
satisfied with because lifestyle is much more than just spending money on stuff.
Something I would like you to know before we get started is, I like to think
of budgets as three categories. So I think of your income as a whole circle
and I divide the circle into three parts, just like a pie chart. So one part of
this circle is going to be for wealth building, so that would be either saving
money investing money or paying off your debts. And then the second part of your
circle is for necessities, so paying your rent or your mortgage, paying your
utilities and other bills like insurance premiums for your car. And then the third
part of this circle would be the lifestyle category.
Now, I do not like to compromise on the wealth building category just so that I
can have a lifestyle that I want. Instead what I do and what I encourage other
people to do is to create a plan for the wealth building category that’s
reasonable but also bit pushy for you. You know, one that’s challenging and
will get you further in your financial life and to cut back as much as possible
on the necessities. And then by cutting back on the necessities portion, you have
more money to play with for lifestyle. I have never heard anyone ever say to me, “Gee Annie, I wish I paid more for my phone bill,” or, “I wish the insurance
premium for my car were two to three times higher.” Nobody has ever said, “I
wish the things the amount of money that I paid for my necessities were two to
three times more.” But everyone, EVERYONE, wants to spend more on
lifestyle because those are the enjoyable aspects of life. So if you have
trouble cutting back on necessities you might want to check out my book, 1001
Ways To Save Money. Over there, I go over a ton of ways that you can cut back on
necessities just so that you can maximize the amount of money you have
left over for the lifestyle category. And funny thing. Right now I’m wearing
this cooling scarf. What I do is I drench this in cold ice water for a few
minutes and then it gets cool and I put this around my neck. Outside right now, is
90 degrees and I am NOT turning on my A/C. We do not have central A/C in our
apartment because it’s old so we have to use this window unit. I refuse to turn on
this A/C unless it is so hot that I can’t stand it, or I might have a heat
stroke, but right now 90 degrees… that A/C is off.
Why? Because I’m trying to cut back as much as possible on my
necessities so that next year my significant other and I have enough
money saved up for the down payment for us to buy a condo. This is just one small
example of the ways that we cut back on necessities just so we can have the
lifestyle that we want, even though sometimes it might make us feel
uncomfortable. In order to create the lifestyle that you want on a budget,
you’re going to have to prioritize and be intentional. I like to think of
lifestyle as a few different categories, so here’s a list of them: physical, and
health, personal and social, work and career, family, spiritual, financial, and
mind/intellect. Something you have to understand is that money is just one
resource. We can have somebody who is super rich. Let’s say someone is a
billionaire and money is just not an issue for this person. This person can
buy as many goods and services as he wants. Money as a resource is just not a
problem. There’s no limit for this person. I mean… there is a limit–it’s a
billion dollars and there’s so many ways to spend a billion dollars. But I think
in like my mind, it’d be really hard to spend a billion dollars, like spend all
of it. This person is still limited by something else. You are limited by this
thing. Everyone, including me, is limited by this thing. And that thing is time.
Everyone only has 24 hours in a day and not every single person has the same
amount of years in life right? You don’t even know when you will die, so even
though there might be a list of a million things that this billionaire
wants to do or have or buy, this long list. This person is still limited by time,
which is why it’s very important for you to be intentional with what you want to
create with your life. Because you become and you have what you think about. And so
what I want you to do is take that list of different categories for your life
and rank it. I know it’s hard because every aspect
in that list is important. Like, you need your health, you need your education, you
need family, everything is important. Everything needs balance, but I’d like to
rank them so that I know what is most important to me and what is least
important to me, so that I could focus more on having the things that I enjoy
more. The problem I see with people who do not live their lifestyles with
intention is that they buy things–they just buy whatever they set their eyes on.
So oh they suddenly want this and then they buy it. They see this and it
looks interesting, and then they buy it. Oh that looks really cool… let me buy
this too. They just buy whatever they set their eyes on, whatever their heart
desires. And they have no direction. Like they have all this different stuff. They
can pay for all these different experiences, all these different services,
but it’s… I don’t know. I just feel like it’s not as good as having a sense of
direction of where you want your life to be. It looks all glamorous and stuff but
it’s just not something I envy because I feel like life is much more than that.
There’s more to being happy than just buying whatever stuff you set your eyes
on. I see these people they live in so much excess, so much waste, so let me use
a few examples. Okay let’s say you wanted to get healthier then you pay for a gym
membership because that’s part of getting fit. Well instead of fully
committing to that and making a priority because there’s just so many things that
you can do, right? You pay for it but you don’t fully use it to the maximum
benefit. My philosophy when it comes to spending money on lifestyle-related
expenses is go all-out. Like I’m not saying splurge, but definitely–look you
can buy high-quality makeup, you can buy nice clothes… designer clothes, that you
love that handbag that you’ve always wanted. You can definitely go travel
travel the world. You can go and buy that fancy smart phone because you love
technology, the latest technology. And you can definitely have that
gym membership that I was just talking about, but what I see is that people are
wasteful. Like when they buy something, they don’t fully enjoy. They don’t fully
get joy out of this purchase. And in order to get the full joy out of a
purchase, you definitely have to be intentional about what is important to
you and what would make you happy and then you can skimp on the rest. So all
the things that do not matter to you, you can spend as little as possible on them
or you could just spend nothing on them at all. The second thing to do after you
have ranked your priorities and figured out what is important to you, which by
the way that is a lifelong process, is to do a little bit more soul-searching than
that and figure out why it’s so important to you. So get really specific
as to why and probably use an experience to really hone it in. I don’t think
this is something that you can figure out ever, because the things that you
find important are always changing, so the reasons as to why they are important
to you will also change. And if you haven’t noticed, if you realize this, you
can look back at the same experience from a few years ago and how you viewed
that experience at the moment versus how you viewed it one year later, two years
later, three years later, and versus how you feel today in a present, it’s always
changing. So the same experience, just a different perspective or viewpoint. And I
think the same thing happens when you think about what why is this thing just
so important to me? That thing will also change. So why do I want you to know
exactly why you find something important? The answer is that
you might find something important and then there might be cheaper ways to go
about accomplishing the same thing that you thought you could only accomplish on
a bigger income. So I want to use my own experiences from the past as an example
because those are the only experiences I can draw from. I don’t have anyone else’s
experiences to draw from. So in the past, I really wanted to travel the world,
which I haven’t done yet, but I did manage to travel around the United
States. So why was it really important for me to travel at the time? I just
thought it would be really cool lifestyle to have. I saw a lot of people
on the internet. They were like nomads and minimalist and I wanted to have this
unconventional lifestyle for myself. I didn’t want to have a traditional life
path for myself where I go straight to college after high school and then I
work a job and then I retire at 67 and collect my Social Security. I didn’t want
that, so when I saw people online having this lifestyle where they could travel
the world and live in one country for a few months at the
time, I was like wow that is so cool. I want that for myself.
A few years into me having that dream of a lifestyle, I realized, well, the things
that are most important to me about travel isn’t about it being cool or
trying different foods. You know, everyone travels for a different reason,
right? So you might want to travel because you want to try the authentic
food of that area or you might want to travel because you want to get to know
the history of an area. Well I figured out that the reason I want to travel is
because I want to meet new people. I want to socialize and get to know people who
are different from me because I figured that if I meet people who are different
from me, then they will expose me to perspectives and viewpoints that are
different from the ones I already have. And that is how I learn. I learn from
other people’s experiences and how they think and I try to try on
their perspective for myself and see if it’s a good perspective for me to take
on. That is why I traveled. I didn’t have much money at the time.
I was definitely low income. I didn’t get my middle class job until
like 10 months ago. So how can I afford to travel on just $10 an hour
income or $9 an hour income $8 an hour income? So what I did instead of doing
these 1- to 2-week vacations that I see a lot of people who have
middle-class jobs doing, is I would do a 1- to 2-days day trip to another
nearby city so that I can meet other people. And I would also do this for very
cheap. So I would get on a bus. I would just buy a mega bus ticket for
$5 two months in advance because when you do that, you can get it
for $5. And I just hop on the bus with my backpack and I would go. I
would meet couchsurfing hosts and people who took me on tours. They
exposed me to different experiences. That was definitely the most important thing
to me. Other things that were not as important to me… so food was definitely
not as important to me, so I would go to a grocery store and buy ingredients that
I could use to make food to eat for myself while I’m traveling. Something
that I would do is I would make peanut butter jelly sandwiches and I would make
a bunch of them and put them in Ziploc bags. And I would eat them throughout the
day just so that I wouldn’t starve because the other aspects of traveling
were more important to me than food. And of course, though, every time I visited a
new city I would try to try at least one dish. So I would be willing to pay for
one dish that was what this local area was known for. So in Columbus, OH
when I went there, I was told that I definitely have to try Skyline Chili. So
that’s what I did. I know this is like a really cheap fast-food restaurant but
it’s not something that I would find in New York City so I went ahead and tried
it out. I would like to use another past experience of mine to help you
understand this concept even more, of using the why to figure out a way to
create a lifestyle that you want while on a budget. So something that’s always been… not always… but has been important to me since my early
teenage years is full freedom of expression. So when I was a young girl, I
really wanted to be an actress but I’ve always been told by my parents and
guidance counselors that there’s no way I could ever become an actress, so I’ve
given up on that. I tried out music. I took music lessons when I was younger. I
played guitar and violin and I’ve always been told by the people around me
that I can never make it as a musician so I quit doing that. So many things that
I’ve wanted to do to express myself… people have told me that I can’t make a
living out of it, so I I’ve pretty much made it my life to accomplish this: to
have that expression without being limited by money or by what other people
say. And many times my perspectives and my viewpoints… they are very different
from how other people would think so when I was younger I would be told by
the adults around me, my teachers, my guidance counselors, people that I looked
up to… sometimes they would imply or outright say to my face that my opinion
doesn’t matter. And it’s only now that I realized that
I’m just very idealistic and I’ve decided I’m going to make it my life to
be to spread that idealism to other people because people are just so
pessimistic and cynical about life. And I want to be able to inspire and empower
people to think better. Something that I did was I paid $90 for a Toastmasters
membership and this club met every single week so I made sure after I paid
that $90 because $90 meant so much to me, especially when I was making $10
an hour, to show up every single week. I did not miss a single week unless
I absolutely had to. I was fully committed to what I was doing after I
made this purchase because I understood my why. I understood I really need this
to become a better speaker, spreading that idealism that I have. Something else
that I did which is also very cheap was writing. I started this blog and in fact,
to start a blog is free, but I wanted a blog with my own domain name. And that
costs $100 a year. It’s very cheap in the grand scheme of things. And I wanted
to teach personal finance to teenagers because I wished someone taught me this
when I was a teenager. Because I was always so scared about money and how my
financial life would turn out when I was a teenager,
especially with the dream to travel the world. So I went ahead and I began
volunteering for a local organization and I went into public schools to teach
these young teenagers how they can manage their money properly, especially
once they start going to college and having their first job. And volunteering
is free. And that is also part of my freedom of expression I’m trying to
accomplish. Something else would be dance. So I tried pole dancing classes at my
local studio and they were offering early bird classes because no one showed
up to them. Everyone else had a 9-5 job so people wouldn’t be able to show up for
the 10 o’clock class, but I would because
I had more of a flexible schedule. And those classes were only $15. And another
thing that would also contribute to my freedom of expression was I learned how
to sew. So the initial cost of a sewing machine, which is only $100, and then
maybe a steam iron, and fabric scissors, and then the recurring expense for
fabric and thread. And sewing could be a cheap hobby or an expensive hobby, but I
tried to keep it as cheap of a hobby as possible. And how does that fulfill my
desire to fully express myself? Well, I wanted to express myself through clothes. I
couldn’t find clothes that I liked in stores, so I attempted to make my own
clothes myself. Or if I did find clothes that I did like, I didn’t like the way
they fit on my body so I began altering these clothes to fit my body the way I
wanted to so that I could be happy with the way that I looked. So I hope through all
of these activities that I just talked about on accomplishing my why, which is full
freedom of expression, you can see just how knowing your why is very important to
figuring out which activities and just how expensive or cheap these activities
are can help you to accomplish that why and accomplish it on a budget. So if
you’re low income, you can accomplish that why on a budget. You have a high
income, you can also do the same, of course. But of course, you’re always
limited by time and you have to think of these activities that you want to do and
you might not necessarily be able to do each activity. I did not do all
these activities I just listed at once. I probably took on one activity at a
given time or maybe two activities at a given time to pursue this freedom of
expression that I wanted to do. So the message I want you to take home
today is that the hardest thing when it comes to creating the lifestyle that you
want on a budget isn’t actually the budgeting portion because really when it
comes to budgets, it’s like shuffling numbers around on an
excel sheet to make stuff work. It’s very easy because it’s just math: very simple
adding and subtracting. The hardest part is the question: what is most important
to you? That is a very hard question to answer and some people they live their
entire lives without ever figuring out the answer to that question, which i
think is very sad. So if you like this video, please give it a thumbs up, and
share it with your friends. Leave me a comment below. What is the most important
thing to you, if you know what it is? This video on lifestyle and creating a budget
for that lifestyle is just part 1. I am going to continue this topic with part
2 because I feel like just talking about the money aspect doesn’t do this
topic justice. So I wanted to expand on this topic even more though the next
topic isn’t going to be on budgeting. What the topic will be is a surprise so
please subscribe to my channel. And I will see you next time!
Bye guys!

37 thoughts on “How To Budget For Lifestyle On Any Income (Part 1)

  • Such a fantastic outlook. Thank you so much for the inspiration !!!!! I'm focusing on saving for land & a tiny home to retire …

  • My Sister from another mother (right along my other relative, Andrew Yang haha)! ANNIE! THANK YOU for tackling this topic that I suggested. It is a broad topic but your video has shared some great tips and inspirations from your life. I was cracking up when you told us about your soaking scarf (thought it was an ascot at first lol) and making peanut butter jelly sandwiches when you travel (so ASIAN XD). Keep up the great work and I look forward to your part 2!

  • Girl You know what, when you want something you have figure out a way to accomplish it even when people would tell you, you couldn't do it.! This message is what everyone has to get out of this video. I have very much respect for you! 😊
    We love you from Anaheim California πŸ˜ŠπŸ’•πŸ’žπŸ’ŸπŸ‘

  • Amazing advice! It's a shame most people I know spend money mindlessly without thinking about cutting back on their expenses.

  • Loved this video Annie!! I also love to travel, and have done the sandwiches in a baggie thing when we went to Switzerland, along with pasta in a Ziploc, ha! Funnily enough those are some of my fondest memories. I love trying out local food abroad, and creating a meal from local products at the grocery store rather than going to a restaurant can be just as satisfying and fun if not more "authentic". Breadsticks and genovese salami in italy, supermarket rotisserie chicken and 2 euro wines in France, for example! Can't wait for part 2!

  • watching your video,making me only spend mine salary from outlook for this video is u put up lipstick?

  • Probably the best lifestyle budgeting video on youtube! You are extremely smart and your frugality is very charming! I loved hearing about your frugal travelling! Your philosophy about life is very inspiring to others also!

  • Thanks for sharing your philosophy. Knowing what is important to yourself and being aware of always abiding to your principles is what will deliver results.

  • I like your video and I also subscribe I have a question I want to know what type of phone you have is it a flip phone or a touchscreen?

  • I really like your videos so much. They are super helpful and informative. I just purchased your money saving book.and cant wait to read it .

  • I need to start saving for a used car so I can ditch the car payment. My car is $350 to lease per month. That's a lot. My insurance is high too at $350 per month. I could do so much more with that money. Also, I need to stop spending $150 a week on food. My grocery bill has to also come down. Thank you for these videos. I'm not that far from retirement and have very little saved. Single mom in NYC…It's expensive, but I have to stop wasting money.

  • Really great video and perspective. Especially loved what you said @7:25 – 8:50.
    I like that your philosophy isn't necessarily save more & spend less, but more so being mindful and intentional about what we spend our money on and what will bring us true joy rather than temporary satisfaction.
    I liked the first example you shared and enforcing the idea that we should be exploring what truly makes us happy and why. Which then of course allows us to be more intentional with how we spend.
    All around great video. I love this way of looking at money and definitely altered my perspective positively. Looking forward to the next part. πŸ™‚

  • Can you use diametrically different colors for your pie chart? These are all 1 color scheme. I have bad eyes and this was terrible to differentiate.

Leave a Reply

Your email address will not be published. Required fields are marked *