One Money Tip That Will Change Your Life
Today I’m sharing one thing that will completely change the way that you manage your personal money. For free. So listen up!
If you think about it, there are two types of expenditures that go through our personal account on a day to day basis. Those are:
1) Committed Expenses - You pay these every month / quarter or year. They’re probably direct debits or standing orders. They are your bills, your rent, your mortgage, your gas and electric bills, etc. They are predictable, they go out of your account regularly, and you know when they’re going to go out.
2) Flexible Spending - These are things like food shopping, fuel, coffee on your way to work. Things you pay for with your card or cash.
The one thing I highly recommend you do as soon as you can is SEPARATE THESE TWO TYPES OF EXPENSES. Have a bank account where you pay your committed expenses from, maybe the account you already have. You can sit down and quite quickly make a list of all the direct debits and all the standing orders that you have, and know EXACTLY how much this account needs in it each month.
Then set up a separate account for yourself from which you will spend using your cash or your card.
The reason I say this is because what that means is on a day to day basis when you look at your Flexible Spending account, what you are seeing is the true balance of that account. it’s literally what you have available to spend for the rest of that month.
So each month, when you get paid or withdraw money from your business, you immediately put the correct amount of money straight into your committed expenses account. Then, you can forget about it. It’s done. No more ‘Oh god I’ve still got to pay the gas bill so if I take away that from that and then….’ NO! No more calculations mid-month. Your bills are covered, and you can be clear on how much you’ve got left.
So there it is. If you implement this I promise you it will make a difference to the way you manage your money. If you like this, it’s one of many tips I share in the Making The Most Of Your Money course. Check it out!
Did you enjoy this? Want to hear more from me? Sign up to my newsletter to hear more from me.
Hi there I’m Gail Bainbridge. I have taken my 20 years of experience as a Chartered Accountant working with small businesses and their owners and become a money mentor.
I am on a mission to transform your relationship to money. I can teach you how to find money that you didn’t know you had so you can spend it on living a life you love.
Need some help with your money take a look at how you can work with me.