If you think monitoring the cashflow of a $12 a DAY income is useless, hear me out…
When I started my first job, I was elated!
I finally had a steady source of my own money.
But as the first month went by, I realized I was only living from paycheck to paycheck.
No money left for savings.
No money left for investments.
No money left for growth.
So, at the start of my 2nd month at work, I only ate veggies and soup for lunch because that was the cheapest meal available at the time.
I computed my payslip…
What my daily pay was versus what my daily expenses were.
From my commute fees, lunch, coffee, morning snack as a substitute for breakfast… Even the McDonalds meal I reward myself from time to time. Or Chinese takeout – whatever I was in the mood to “splurge” for.
Once I saw the numbers, it confirmed my hunch: my salary only looked “big” on payday – but in truth, it just barely covers my daily expenses.
Upon realizing that, I did what I could to lower it and tried to save about 20 dollars per cutoff. (10 if I’m on a tight budget)
(Also, yes dear reader, per CUTOFF – not per day.)
After a year, I was able to save around 400 dollars which I used to buy a laptop.
And that was the laptop I used to study Web Development and freelancing.
It’s the same principle I used starting my own ecommerce business — my wife, Glad, and I saved up $1500 US dollars which we used for inventory and ecommerce business training.
I didn’t know it back then, but as an afterthought now, I realize I learned the basic principles of controlling cash flow.
An essential skill for any entrepreneur, but one that I unfortunately see many lack.
See, without knowing exactly how much you’re making, prevents you from making smart decisions for your business (decisions I will share for another time).
If I didn’t start computing my first pay, I’m a 100% sure my ecommerce business wouldn’t see the light of day.
Making decisions without knowing your numbers means you’re deciding based on hope, gut, and intuition; and although going on gut-feel instinct is a whole skill in itself, it leaves a lot of room for error and blind spots.
It’s like driving a car while having a blindfold on.
Exciting, but extremely dangerous.
And a sure recipe for inevitable failure.
If you don’t know what your expenses are, then you don’t know how much profit you’re actually making in your ecom business.
At the end of the day, you need to know your numbers no matter how small – because you cannot get to where you wanna go, if you do not know where you’re coming from.