Self-made millionaire: To be rich, you need to calculate ‎accurately your income

If you want to get rich, you must first know some things related to your expenses, such as how much you spend on groceries, entertainment, gifts, and even how much money you pay in tips.

According to “CNBC,” Dominique Broadway, a financial advisor and first-generation millionaire, told CNBC Make It that verifying all this data may be difficult, but at least there is one number that you need to calculate accurately, which is your income subtracted. Of your expenses

Broadway notes that she is sometimes surprised that there are very few people who can tell her about their net profits.

She explained that this issue does not need a spreadsheet on Microsoft Excel, but it is possible to reach accurate numbers on it only by using a pen and a notebook and knowing the data of your bank accounts.

It can be stressful and intimidating to take a good look at your numbers, but you only have to do it once a year.

The first step: your income

What is meant by income here is the amount of money that is added to your account each month after taxes, and includes all the money that you earn from a full-time or part-time job or rental income.

If your income is fluctuating, you can use your average monthly income over the past six or twelve months.

Second step: your expenses

Managing the affairs of your life requires a lot of money, as many of us have expenses that we sometimes do not realize that we are paying them, so you should look at all your transactions and then write down the expenses for each of those elements.

Broadway divides those expenses into a list of several items, namely, housing (rent or mortgage loans), services (electricity, gas, water, heating, internet, television), cell phone, groceries, and eating out.

The list also includes transportation, shopping, buying clothes, gifts and donations, student and car loans, and credit and savings card payments.

She explained that once you reach the total amount of all expenses, they can determine your net profits

What is the benefit of reaching a specific number of net income?

In the event that your net income is positive, you can use it to achieve your goals, such as paying off debts, investing or buying a home.

Broadway stressed that the issue is not related to whether the net income is $ 100 or $ 10,000, the most important thing is to find room to maneuver as you start making smart decisions with your money.

In the event that your income is negative, this should not cause a problem for you, because at that time you have to ask yourself two questions:

1- What are the expenses that can be dispensed with?

Go to the list of your expenses, and select the items that can be dispensed with.

For example, you may not need to pay for Disney+ and Hulu, because you’ll get them for free with your plan to buy a new cell phone.

Or perhaps you may realize that you spend a lot of money on a lunch at the office.

2- How can you earn more money?

Make a list of all the ways that might help you to generate extra income, for example think of the talents you have that might help you get paid for them like teaching children the piano.

And if you have leasable assets, like using your car in ride-sharing apps.

Whether there is room to increase your salary in your current job, or start looking for a job elsewhere that will give you a salary increase.