I’m a Self-Made Millionaire: Here’s My Monthly Budget
According to the Bureau of Labor Statistics, the average American household spent $72,967, or around $6,080 monthly, in 2022. With the national average salary sitting at about $56,420 as of 2023, it’s clear that many Americans are struggling to make ends meet, let alone beef up their savings.
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But what about those in higher tax brackets?
We sat down with James Sheriff, a 28-year-old day trader who’s now living the millionaire dream after a decade-long dedication to mastering his craft. Here’s what his monthly budget looks like.
Housing
“I pay around $1,095 a month, including utilities, for my small studio apartment in Santa Barbara. It’s nothing fancy, but I don’t need much as a young single guy. Plus, I love the location. It’s near the beach, so I get to take long walks near the ocean to clear my head when the volatile markets stress me out,” James said.
Though he doesn’t own a house yet, he’s considering purchasing a single-family home in Texas or Florida within the next two to three years.
“My budget is around $500,000, and I’m pretty sure I’ll pay it in cash,” he shared.
Groceries
“To be honest, I barely spend anything on groceries since I don’t cook. So, I only budget about $50 to $100 a month for basic stuff like eggs, water, milk, etc.,” James said.
While he doesn’t spend much on groceries, James admitted that he splurges on Uber Eats and eating out.
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Dining Out
“I’m embarrassed to admit this, but I spent almost $1,500 dining out and ordering Uber Eats last month,” James said.
On a normal month, he also spends close to $900.
“I love trying new restaurants and treating myself to a nice meal. I know it’s a lot, but I don’t date, nor do I spend money on fancy clothes and designer items, so I might as well spend it on good food,” he shared.
Miscellaneous Expenses
Aside from food, James also spends a significant chunk of change on his family.
“I work hard so that I can give my parents and grandparents a better life,” he explained.
So, instead of hoarding all of the money he makes, James gives his parents and grandparents a few thousand dollars each month to financially support them and show his appreciation.
“It’s a part of my culture to give back to my family, and I do it wholeheartedly. It’s an awesome feeling knowing that my hard work is paying off and my loved ones don’t have to worry about making ends meet anymore,” he said.
James estimates that his other miscellaneous expenses, such as Spotify subscriptions, Amazon Prime and phone bills, add up to around $150 to $200 a month.
Savings
“This is where most of my budget goes. I’m a minimalist, so it’s been pretty easy for me to save aggressively.”
James wasn’t comfortable sharing the exact amount he’s putting away each month, but he estimates that it’s close to 90% of his net income, sometimes more.
“I split this between stocks, crypto, high-yield savings accounts, and retirement accounts to make sure I’m building wealth for the future,” he said.
Debt Payments
Because James dropped out of college early to pursue day trading, he didn’t accumulate any student loans. He also pays off his credit card debt in full each month so he’s not burdened by any high-interest debt.
“I’m pretty lucky to have a clear financial slate and no financial shackles holding me back,” James said.
Managing Money as a Self-Made Millionaire
“As for how I’m managing my finances as a millionaire, I’d say I’m pretty happy with where I’m at. But, of course, there’s always room for improvement,” James admitted. “Day trading can be risky, so I’m investing in myself by learning how to code and getting into real estate investing. This way, I can diversify my income sources and not entirely rely on trading. Because to be honest, though I’ve made millions off of day trading, it’s not for the faint of heart, and I don’t plan on doing it forever.”
He’s also working on becoming more disciplined with his spending and diversifying his investments even further.
“Being a day trader doesn’t mean I’m financially literate, so I’m considering working with a financial advisor this year to help me optimize my finances and make better money decisions.”
What Does a Realistic Budget Look Like?
While splurging thousands of dollars on food each month may not seem like a big deal for millionaires like James, it’s unrealistic for the average American. To build a budget that makes financial sense for you, consider following the 50/30/20 rule, which divides your monthly after-tax income into three spending categories: 50% for needs, 30% for wants and 20% for savings and debt repayment.
So, if you’re making $5,000 after tax each month, $2,500 would go toward your needs, such as rent and utilities, $1,500 would go toward wants, like shopping and entertainment, and $1,000 would go toward building up your savings and paying down debt.
If you struggle with tracking where your money is going each month, use a budgeting app like YNAB or Simplifi to monitor your spending and help you reach your savings goals.
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