Easy Financing Without the Big Word Jargon

Find out if you can you afford your bills, and options if you find out you can't
Ways to start and pay off debt faster, and build your credit whether you have any or not
Design savings accounts for emergencies, fun and retirement
Life hacks that save money in the home, entertaining kids, dating, and more
Scroll to the very bottom if you just want to see the formula, go through the steps to better understand the process and create a budget that fits you

No, I'm not some financial expert like Ramit Sethi, "I Will Teach You To Be Rich", or Tiffany Aliche, "The One Week Budget", but these are the people that I look for guidance. It's why I even have a blog and social media filled with affiliate links. They are the reason I started taking control of my finances and seeing improvement. I just wanted to make the formula a bit simpler, the way I created one that works for me. Hopefully, it works for you, too. To go straight to the formula, you'll have to scroll to the very bottom. Steps One, Two, and Three tell you how to create your own formula based on your type of income and expenses, with ideas of how to reduce them and make more money.

Step One

Step one is fairly basic but can be challenging for those who don't have a steady income, receive commission, and/or work odd days and hours. Don't worry, I've been there. I've had them all. I got you. You need to figure out what your least amount of monthly income is after taxes for a regular 4 week month, anything else is extra to play with and save. Don't forget to figure out how much your actual paychecks are after taxes are taken out at the bottom of the examples.

For my Full-Time Hourly People, you should already have an idea of what you bring in after taxes because it should say on your paycheck. Same with my Salary People, except you don't have to work out the exact hours to figure out your pay because salary means you will work how ever much or little is agreed upon during accepting the contract. Because everything can be direct deposited these days, you may need to ask your employer if there is a way to get an email that has the details of the check with the pay, hours, and taxes, similar to seeing a regular paystub. It's still a good idea to do the math, so you know how it works and what it should look like, so you know you are getting paid right. You multiply your hourly pay (example: $20) by 8 hours per day first, if you work a full 8 hours. Some companies schedule you for 8 hours, but have you clock out for lunch for 30 to 45 minutes, so you technically only worked for 7 hours and 15 or 30 minutes. Others will schedule you past 8 hours to make up for the lunch break, like 9 a.m. to 5:30, 5:45, 6:00 p.m. You need to know what your exact hours are. I recommend underestimating if you are clocking out at quarterly time frames like 5:45 or 3:15. (example: I would count 9 to 5:45 as 7.5 hours as if it was actually 9 to 5:30) It's easier for math purposes, especially if you occasionally leave early. The formula example is below.

The Math:

$20 per hour multiplied by 8 hours worked per day = $160 income per day before taxes

$160 per day multiplied by 5 days worked per week = $800 income per week before taxes

$800 per week multiplied by 4 weeks worked per month = $3,200 income per month before taxes

For my Part-Time Hourly People, you have to be real with yourselves on how much you are scheduled to work. Unless you and the employer specifically said you will be working X amount of days and X amount of hours, your employer can schedule you for as little hours as they please. WARNING, if your employer starts scheduling you for less and less hours, they want you to quit so they don't have to pay unemployment fees to you for firing you. Most part-time job post will say 10 to 20 hours or 12 to 30, which means you could be working on the lighter side sometimes, or the max agreed upon. Maybe your employer alternates your weeks, 3 days one week, 4 days the next. Maybe you usually work 6 hours, but occasionally work 4 hours. All of this matters, and if you just started at a new job and have no clue what it is going to look like, ask your boss "what will my minimum days and hours look like per week, so I can estimate my finances, please?" The process is basically the same as the full-timer person. You multiply your hourly pay (example $20) by the least amount of hours you will work in a day; let's say 4 hours. Then continue the math for a 4 week per month time frame below.

The Math:

$20 per hour multiplied by 4 hours worked per day = $80 income per day before taxes

$80 per day multiplied by 3 days worked per week = $240 income per week before taxes

$240 per week multiplied by 4 weeks worked per month = $960 income per month before taxes

For my Commission People. First of all, the majority of you also signed up for a minimum hourly pay for a base rate, so you still get to go home with something if you don't make any sales. Your employer probably said something like "Your base pay will be $15, but everyone always makes more than that because of the commission." It's a lie. It's very rare that the new person makes more than their hourly pay for the first couple paychecks or so, and there are going to be times when you don't get the commission due to sales quotas not being met that they most likely did not explain to you either. So, it's very important to know what your hourly pay is and what your minimum hours per week worked are going to be. If you are scheduled from 9 a.m. to 5 p.m. at $15 per hour, those are the numbers you use because you need to make sure you are living within your means. The extra commission or tip money is exactly that, extra, extra money to play with, extra money to put into savings, extra money for clothes, etc. It's not to be counted as your base income because it's sporadic and unreliable. You use the same process, multiply your hourly pay (example $15) by the least amount of hours worked in a day (example 9 a.m. to 5 p.m. is 7.5 hours), and continue the process below.

The Math:

$15 per hour multiplied by 7.5 hours per day = $112.50 income per day before taxes

$112.50 per day multiplied by 4 days worked per week = $450 income per week before taxes

$450 per week multiplied by 4 weeks worked per month = $1800 income per month before taxes

For my Freelancers and Business Owners. Yours is a bit complicated since it's based on you bringing in the client and what you charge for your services, but it is possible. Similar to the part-timer, if you haven't just started your freelance career, you should have an idea of the minimum amount of work you do per day or week. Or, you have a minimum number of clients per day, week, or maybe month. For easy numbers sake, let's say you know you always have at least 3 clients per day and the lowest service charge you have is $75. You would multiply the minimum service fee of $75 by those 3 clients to get your minimum income per day before taxes. The formula is below. Keep in mind, most freelancers understand that they may still need a part-time job to have a stable income coming in, especially if they are just starting freelancing and are not getting a consistent clientele. This will mean that you need to start your calculations with your stable income. Then you work on your freelance income. It will depend on if you are bringing in clients consistently, or if you have to consider your freelance money as "extra" for the time being until consistency is achieved. The freelance formula is below. Scroll up for full-time or part-time employment formulas.

The Math:

$75 service fee multiplied by 3 clients per day = $225 income per day before taxes

$225 per day multiplied by 4 days worked per week = $900 income per week before taxes

$900 per week multiplied by 4 weeks worked per month = $3600 income per month before taxes

My poor, poor, poor Students... Yours could actually be the most complicated. Grants and scholarships only come 1 to 2 times per year. Some of you only work during breaks and the summer. Some of you work full-time and go to school full-time (I don't know how you do it!). You may have to use a variety of these methods to figure out your finances. Scholarships and Grants put you in the Salary section, but you have to make them last throughout the semester. If you get a $5,000 Pell Grant, you have to extend that money for a 4 month time frame (a semester). So, $5,000 divided by 4 months means you have $1250 per month. Keep in mind, this Pell Grant goes straight to the school. The only way you get it is if you managed to get extra scholarships or other forms of tuition payments and it exceeds the actual cost of the semester. So, if you don't get to take home any of that money, how are you going to pay for rent, utilities, gas, and groceries? I know everyone wants to get out of the house when they turn 18 and stop abiding by their parent's rules, but it might not be feasible. Or, you may have to attend college part-time so you can maintain a full-time job for your expenses. The best advice I can give you is stay close to home, if possible, have roommates, if you can't, state colleges that you are a resident of will be cheaper, so are community and trade schools, apply for FAFSA (financial aid, especially if you don't live with your parents and they aren't paying for college) every year, most colleges have a list of scholarships you can apply for throughout the year online, find out everything your school offers for its students (I just found out I can dental work done by their dental students for less than any dental clinic charges), apply for disability assistance, if you qualify, for homework extensions, and being part of school organizations gives you access to more scholarships and a larger network for employment.

After Taxes

You may already be able to see how much taxes are taken out of your paychecks, but not everyone really knows or understands it. You may see something called FICA Taxes. This pays for things like social security and medicare that will eventually be given to you once you retire. Some states have a State Income Tax that you pay. It's what the state needs from its residents to work on the roads and pay their government employees that keep your state operating. All together, these taxes can total anywhere from 15% of your paycheck to 35% of your total paycheck.

You can ask Google what the percentage rates are based on your state and county. Example of what to ask Google "what are the tax percentages taken out of a Burnsville Minnesota paycheck?"

Response:

Federal Income Tax is between 10% - 37%
Social Security is 6.2%
Medicare is 1.45%
State Income Tax ranges between 5.35% - 9.85%

Notice there are some that have a range. That's because the government can't take 37% of everyone's paycheck for the state income tax. You all don't make the same amount of money. They have to leave enough for you to be able to support yourself. They take out a certain percentage based on what income bracket you are in, up to $25,000 per year, or over $100,000 per year, etc. So, the easiest way to figure this out is by looking at your personal pay stubs and doing the math. So, let's look at someone who makes $20 per hour and gets paid bi-weekly first.

The Math:

Gross Income Before Taxes for someone who makes $20 an hour = $1600 every 2 weeks

Bi-weekly paycheck only gives $1152 to employee

$1600 income before taxes subtracted by $1152 income after taxes = $448 total taxes are being taken out of paycheck

$448 total taxes divided by $1600 gross total income before taxes were taken out = .28 (28%) of your income is being taken out for taxes from every bi-weekly paycheck

You may make $3200 per month ($1600 paycheck one plus paycheck two $1600), but you will only get $2,304 in your bank account ($1152 paycheck one after taxes plus $1152 paycheck two after taxes)

For my Freelancers and Business Owners, remember you will need to take out taxes yourself and put them aside to pay the IRS on your own. They do not do this for you. As a business, you usually need to take out more than what an employee would see taken out of their paycheck. Most business gurus recommend taking a minimum 30% of your income out and setting it aside for taxes, and 40% is what they would prefer you set aside. Based on how much you bring in will determine if you have to pay the IRS quarterly or yearly. Most businesses pay quarterly, but it's important to check in with your state's and county's regulations so you know when they expect payments.

Step Two

Next, we have to look at all monthly bills and subscriptions; you should not have any that are not monthly other than possible medical treatments. Some people do have weekly medical bills and therapies. You will have to add those up so you can see them as one large monthly bill. We will go over what's necessary, what's not, what can be consolidated, what can be lowered, and options to reduce bills and get money back, even on gas.

Possible Monthly Bills

Rent

Mortgage

HOA

Property Taxes

Electricity

Water/Sewer

Gas

Pest Control

Trash/Recycling

Car Loan

Car Insurance

Student Loans

Phone

Internet

Microsoft

Pets

Kids

Credit Cards

Personal Loans

Health Insurance

Life Insurance

Groceries/Toiletries

Gas

Netflix

Hulu

Gym Membership

Cable

Bus/Public Transportation

Medical Bills

Savings

Retirement

Investments

Emergency Fund

Monthly Bills

This is just a list of possible monthly expenses on the left. They are going to look differently for everyone and some of these may fluctuate, like utilities, or they may increase over time, like rent. The trick is always overestimating the bill. If your rent is $1062.73, round up the last dollar so it becomes $1063. This is how I calculate all of my bills and expenses. Every receipt I get, I round up the last dollar. If I go out for coffee and it costs me $6.53, I calculate it in my records as $7 spent. Rounding up gives you wiggle room in the event that you accidently overspend while becoming money savvy. Rounding down your income ensures you aren't receiving more money and aids in the wiggle room.

Bills That Are More Than Once A Month

These can be a little tricky, but totally doable. If you know you need to purchase medications every couple of weeks, then you may already know how much you need every month to get them. However, there are a couple months out of the year that are slightly longer. This may cause you to need extra medication during this time. Luckily, this usually means most people will get a little extra money on their paychecks during these months, too, if they work hourly. These months are January, March, May, July, August, October, and December. To make this easier, we typically have 35 weeks out of a year. So, if you need medication or therapy, etc, every 2 weeks, divide 35 weeks by 2 weeks will give you 17 and a half medications required for the year. 17 and a half times you will need to purchase this medication out of the year. Remember, we round our bills up. 17 and a half becomes 18 times you may need this medication or therapy.

The Math:

18 multiplied by $45 (cost of medication, therapy, etc) = $810 per year

$810 total per year divided by 12 months = $67.50 per month (Round Up!)

Bills That Are Yearly

Some bills can also be yearly. Take Amazon Prime as an example. Most people have it. They pay X amount of money per year so they can watch movies, TV series, and get free shipping on products. I'm an Amazon Prime member because I would rather have as much things shipped to me than have to run around to multiple stores to get everything I need and want. Plus, the movies and TV shows is a bonus, especially if I want to watch a movie that is in theaters, but I don't want to go one. Mine is currently at $139 per year. With the formula below, I know that I need to save $12 per month so I can pay for my Amazon Prime every year, which is billed December of every year. Yes, they have a monthly option if you prefer.

The Math:

$139 per year divided by 12 months per year = $11.54 (Round Up!)

Loan and Credit Card Bills That Have Interest

This is probably where most people get confused or wonder why these bills aren't getting smaller even though they pay them every month. The problem is the interest. Most loan and credit bills give you the option to pay a minimum fee in order to avoid a penalty fee. This minimum fee is not how much you actually need to pay. If you are just now trying to figure out your finances, what you can afford, and how to pay off your debt, paying the minimum is totally fine. Eventually, you will need to pay more if you ever want them to go away and stop stressing you.

Let's take a look at the worse one, the credit card bill. At this moment, I have one, and I racked up some debt over last summer. So, we can use mine as the example. My current total debt on my credit card is $5,118.17. I have a couple small monthly business expenses that I linked to this card because it is a cash rewards card. When I use it, the credit card company gives me a little cash back. It's a very small amount, but that's because the business bills I have attached to it only total $68. So, I know I always have to put $68 away per month to pay off those bills.

Next, I live in a state that has toll tags. If you don't know what that is, there are tolls all over the highways in Texas. This is to make up for my state not taking state taxes out of our paychecks to help pay for all the road construction they are always doing. If you also have to pay tolls occasionally, I highly recommend opting in for their automatic renewal plan. It will save you money on tolls this way. Generally, I pay $40 in tolls per month. So, now I know I need to pay $68 plus $40 on my credit card every month.

Then, the credit card also charges me an interest fee every month for allowing me to use their credit card. This fee is a percentage based on how much I owe. If you have a credit card, you should be able to scroll through last month's charges and see how much they charged you. Last month, they charged me $91.16 (Round Up!). So, now I have to pay $68, plus $40, plus the $92 on that credit card.

The Math:

$68 linked business bills plus $40 in tolls plus $92 for the interest fee = $200 True Minimum Bill for Credit Card

More Is Necessary

Unfortunately, that $200 still isn't going to get me very far. All the actual expenses/bills are being paid with that $200, but it will still feel like it is never going away. You can use this formula to figure out your true minimum, just know that when possible, you will need to pay more than that. So, when you are able to, start paying more, even if it is only $10.

What Are Your Most Important Monthly Bills?

Let's talk about these monthly bills a bit because you do not have to calculate all of these. You should definitely be aware of how much gas you need to get to work or school every week, but also understand that some weeks won't require you to spend money on gas, while other weeks you may spend more than usual if you go out to socialize or pick up a food delivery job. I have done the budget where I calculated every single thing, including knowing how much I spend on oil changes per year and dividing that up as a monthly expense I put away in a savings account to use when my vehicle is due. I highly recommend doing this first so you can see everything on paper and understand how much it really costs to make a decent living. Life changes though. Jobs change. Payments change. Eventually, it was too much to look at and I couldn't always afford to put money away for certain expenses.

My current apartment has me paying for trash, pest control, and an amenity fee. These never change. I lumped them all in one payment on my spreadsheet in my rent bill. Even their transaction fee stays the same. However, every month I need to adjust what this monthly rent bill is because they also include gas and water/sewer in the fees. These fluctuate. So, one month my total rent bill may be $1303 or it may be $1324 the next. Because I get paid monthly, I update my spreadsheet monthly and add any extra income as it comes in on my excel phone app. Before I start spinning your head, it's best if I show you.

Personal Monthly Bills

Rent $1369 (Includes apartment fees, gas, water)

Utilities $142 (Reliant electricity plan/has rewards)

Verizon $98 (Includes unlimited data, home internet, and more)

Car Insurance $53 ( Try Jerry App to choose what you pay for)

Renters Insurance $9 (found from Jerry App/has rewards)

Netflix $20

Monthly Personal Bills $1685

Yearly Personal Bills $20,220

I have had things like groceries and gas in personal bills calculations many times, but they change too often. I've tried various ready to eat meal programs and while back in college, the amount of gas I use depends on how often I need to go to class and when I can skip. I still know how much money I need in my account every week for gas though. I keep that locked in the back of my mind.

Business Monthly Bills Linked to Credit Card

Canva $13 (Social Media Content Program)

Microsoft $11 ( Microsoft available yearly/has rewards)

Wix $21

Google $5 (Storage)

Amazon $18 (Includes ad removal fee)

Monthly Business Bills $68

Yearly Business Bills $816

You may not have business expenses like me, but I wanted you to see what some of those may look like. Also, pay attention to how on both my Personal calculation and my Business calculations include how much they cost me for an entire year. I know I need to make a minimum $20,220 per year to pay my personal bills and a minimum of $816 to pay off my business bills. When I add these together, I get $21,036. This DOES NOT include all the expenses for groceries, gas, clothing, or even my pet expenses. This is why you should have a general understanding of how much all of your expenses costs every month so you know if you are even making enough income to support yourself and/or your family.

Monthly Savings and Retirement

Emergency Savings Account

Travel Savings Account

Market Saving Account

IRA Easy Start

IRA 7 Year Plan

Currently on hold

NO, you do not need to have this many savings accounts and retirement accounts. If you are a beginner and don't even have a savings account, just start with one. Originally, I just had one saving account that I used for "emergencies" or whenever I ran out of money, WHICH WAS OFTEN. Eventually, I wanted to be able to enjoy my vacation time, so I added another regular savings account and named it my Travel account.

I started small. I put in $25 in my emergency savings account only once a month. Eventually, I added $25 per paycheck to that account. When I had decided to add the travel account, I split my contributions between the two. Then I started to really enjoy how much money I was seeing in those accounts, not feeling so stressed when emergencies happened or I had a bad paycheck. I even was able to travel when I took PTO as an employee.

Also, notice how I do not have a set monthly amount listed and at the bottom it is says currently on hold. This is because I currently do not get regular paychecks as a student. I get paid monthly, but grants and scholarships only come in 1 to 2 times per year. Because my income varies, I put different amounts into these accounts every month, and sometimes I only put money in some of them, not all.

An even better example would be the 7-Year IRA I have. In order to put money into that account, I have to put in a minimum of $500 at a time. However, I am only allowed to put in $7,000 in it per year. I just found this out while doing my taxes on TurboTax.

My Easy Start IRA let me put in whatever amount I wanted into it, but it caps out at $3,000. I can longer add money to that account, so it just sits there gaining interest income every month off of that amount. It's a great option if you want to start a retirement account with your bank but can't afford to put in big chunks of money in it at a time. All banks are going to be different though. Some may not even offer retirement accounts.

All Monthly Bills and Savings/Retirement

Personal $1685

Business $68

Savings/Retirement On Hold

Total Bills/Saving/Retirement Per Month $1753

Notice I need to bring in $1753 per month just to pay all my regular bills. Remember, this does not include my groceries, gas, or anything fun, like going out to eat with a friend or Starbucks.

So, if you are starting to notice that you aren't making enough to cover all your bills, your basic necessities, or any fun expenses you will need to be ready to make some changes. This is where Step 3 comes into play to figure out how you can reduce your bills and still enjoy your money.

Step Three

This last step is to help you get a grip on your finances, find out where your money is going, keep track of it, find other reward programs, reduce your bills, and make more money. I know a lot of influencers want you to download apps that track your money for you and connect to your bank account. You can totally use those, but I'm a bit of a control freak when it comes to my money. I don't even invest because I'm too scared of the risk, and I do not gamble. The only app you will ever need to keep track of your money is already included in your Microsoft program, Excel. Yes, Excel has an app for your phone so you can keep track of your money on the go which allows you to input your expenses Rounded Up to the last dollar like I mentioned in Step Two. It has a number of options to choose from to create your own spreadsheets and has money management options that calculate everything for you so all you have to do is plug in your numbers. My favorite is the Personal Budget in gray and blue. I create a new one every month and label it "Jan 2026".

It already lists income, rent, utilites, groceries, and savings. All you have to do is delete the numbers they inputted for a reference and plug in your own. Every time I receive extra income from my side business, I add them under income section and write what it was from. Then I write under the savings income tax and take out a percentage from it and place it in my dedicated savings account. Whenever I go get gas, I immediately input the amount I spent on gas (Rounded Up) under the monthly expenses, and this goes for all expenses. It only takes a couple minutes, and you don't have to worry about saving receipts.

For those of you who found out you are spending more than what you make or you don't make enough, here is a list of options to help. Keep in mind, I also have other blogs on my site that can also help save money. Before I tell you to start getting rid of all of your subscriptions and fun expenses, I want to focus on ways you can make more money and save money.

Get a raise at your current job or get promoted (this I can't help you with, but I will say there are plenty of YouTube videos that can help)

Apply for a better paying job with better benefits (also lots of help on YouTube)

Get a second job (most people think they don't have the time for this, which may be true, but here are some options that allow you to work a second job based on your availability 1. Uber 2. Door Dash 3. Pet Sitting or Boarding on Rover 4. Babysitting on Care or Sitter City 5. House Cleaning or Moving Help through Task Rabbit 6. Amazon or Walmart Affiliate and Influencer Programs)

Create a side hustle or business (similar to getting a second job, but will most likely cater to your personal skills and has the potential to replace your current job if it begins to make as much or more)

Reward programs that save you money

Upside Gives you cash back on gas and food purchases, I usually cash out every time it hits $20, but you can whenever
Food reward apps like Starbucks
Pet store reward apps like Pet Supplies Plus usually give you a discount or a free bag of pet food after purchasing so many
Jerry Lets you pick out what you want to pay for car insurance, rental insurance, and has rewards for safe driving
Utility Apps like Reliant have reward programs that give you points to use towards movie tickets or restaurants
I just used my Microsoft reward points to get a $5 Amazon gift card
To Good To Go is set up specifically to find restaurants that are about to throw out perfectly good food just because of restaurant health regulations, and simply because it's closing time, you get the same great food, but for a lot less