We are going to look over all of our expenses and write down how much we spend in a year. Don't stress about the numbers. Just try to be as accurate as you can be.
For payments that you know for the month like your rent or cell phone, multiply by 12. For expensive things that you buy every couple years (new laptop or cell phone or big vacations, for example) divide by the number of years the item is replaced. Some of it is going to be hard because you might not know how much you actually spend. Don't worry. Just come up with an educated guess. Some things like makeup and clothes are going to be hard to fess up to. Others might require a bit of digging (electricity, for example).
Once you have these values calculated, add them all up. This is how much you spend in a given year. How do those numbers make you feel?
Now go find your most recent pay stub and multiply by how many pay stubs you get (typically either 12, 24 or 25). Is your yearly take-home higher or lower than your expenses? Are you surprised? Shocked? Happy?
If your expenses are higher than your paycheck you are living above your means. If it's only a little below, you are living right at your means. If your expenses are 10% below your take home pay, give yourself a pat on the back. There should be about 10% difference and you should save this 10%.
If you are super cool and at or above 10%, congrats! That's fantastic! You'll still want to do Stage Blue (to set your goals) and advanced parts of Stage Green (building your portfolio).
If you aren't at the 10%, don't worry. Mostly everybody is very far from that. This is what we are going to work on.
This is where my biggest trouble is and the part that I am most looking forward to tackling in Stage Orange. We don't overspend, but we definitely under-save.