How to Arrange your Finances Better
There are a few ways in which you can arrange your finances so that despite you spending you will still manage to save a decent amount of money.
Necessary expenses:
If you earn a fixed amount of money every month, I don’t need to tell you about fixed expenses, they put a regular dent in everyone’s happiness! Now, what I am talking about arranging the rest of your finances after your fixed expenses so that there’s enough to go around.
List of important things:
Making a list of important things you need to buy and expenses you incur regularly, such as rent, payments for loans, mortgage payments, car payments and any other fixed expenses.
Leaving aside your fixed expenses, you now need to make a list of other things that need to be taken care of. There are a number of things that we all need taken care of, such as buying new tires for the car or getting a cabinet repaired and other such expenses which are necessary but we may tend to forget when we have the necessary funds available. Once you’ve made a list of necessary expenses you now need to make shoe box accounts for various expenses.
Shoe box accounts:
This is a different and simple to incorporate system of managing your expenses, you need to create a few “shoe box accounts”! What these accounts are is essentially allocating your money toward various additional expenses apart from your fixed expenses. These accounts will help you to organize the way in which you spend your money.
Now once you have your various shoe box accounts ready after you have made your list, it’s imperative that you prioritize depositing a fixed amount of money toward these expenses whenever the opportunity presents itself. The best time to allocate money to your shoe box accounts is when you receive your pay check. Any additional money you receive should also be immediately allocated to various shoe box accounts.
Be sure to create a shoe box account for your personal expenses, or for yourself, the purpose of this style of finance management is not to deprive yourself but rather arrange your expenses in a manner where you can spend money without feeling a sense of remorse or guilt. When you create a personals shoe box account you need to keep in mind that this money is for you to spend in any way you wish without feeling guilty.
There is no limit to how many shoe box accounts you can create it all depends on the number of important expenses that you have. Typically one shoe box account should be created for small savings, this account is not meant to substitute any proper long-term saving plans or retirement plans because the money you put into a shoe box account will pay you no interest, however the money you save here can really be of great help at times.
These were some helpful ideas on how you can arrange your funds effectively. This is a great way of making sure that all your expenses get covered while at the same time you don’t end of depriving yourself.
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Category: Family Finances
