How I started savings for the first time in my life.
Last year I wasted a lot of money. This new year I was determined not to do the same. I got introduced to a financially advisor last year in my sociology class and i kept in contact with Ms.Jen(name change) for awhile before we lost touch. But some of the things that she taught me stick with me to this day, earlier this year I started back up some of her tools. The most helpful for me was the idea of recording ALL of my expenses.
When I started back up I was able to see what I wasting my money on; a lot of clothes, candy bars, and just a lot of the things i could do without if i wanted better spending habits.
Now unconsciously I always think about every purchase. It’s like this, I’ll see a dress in Angl that i want but then i’ll say that I can put that money into my savings account instead and watch it grow. So it turns into a no on the skirt.
Where my money goes?
EVERY single source of income that I receive goes into the six categories below. It’s something I learned at a seminar by Peak Potentials called Millionaire Mind Intensive. Where I learned that before you can have the right to want anymore money in your life you have to learn to manage whatever you have now to the last cent. It’s why there are millionaires living pack check to paycheck. Everyone no matter who you are have to learn how to manage their money well.
Example: My imaginary $100 bill.
10 % Play Account = $10
Play Account, once a month everything in this account is to be spent on something nice for yourself.
10% Education Account =$10
On things that are seen as educational in your eyes. For me this is books, a kindle, or anything that helps me better myself through knowledge.
10% Give Account =$10
Give account, is where you give it all away to someone/thing other than yourself, and if you think about it, the give money is giving away through holidays and birthdays gifts throughout the year anyway.
50 % Necessities Account =$50
Essential expenses that you can't function without, if you feel like you barely have enough already for this account its time to reevaluate where all your money is going by recording all of your expenses. Maybe cut back on some of those McDonalds trip, and eat at home more if thats one of your problems. Find your spending weakness.
10% Long term savings Account =$10
This account is for unexpected expenses, or saving up for a big item, or even vacation.
10%Financial Freedom Account =$10
This account is the account that you don't ever take anything out. And my suggestion when it gets up put it a interest bearing account. Talk to someone at your local bank about it.
*I am no financial advisor, I am only sharing some tools that i have learned and applied to my own life that have worked for me. I’m not saying that the system will work for you, but it is worth the try if you want to make chances in your own personal finances. Even if finding another system to try other than the one above, because if you change NOTHING, NOTHING will change.
