The Buckets of Personal Finance is a perfect first step in knowing where all your money is going each month. The more specific you are with where every dollar goes the better you set yourself up for the future.
So you know what you personal expenses are, you know what you expenses are, and you know where the money is coming from. What do you do with the money left over? Do you have a plan? In Lesson 5 we are talking about that exact question and we will walk you through an easy first step to making sure you are taking care of your self each month and for the future.
The Buckets of Personal Finance is a customizable strategy that you can change in ways that suite you the best. The basic concept is once the money I make from my business (minus taxes) comes into my personal bank account I allocate specific percentages to different categories. Here is our basic breakdown of those percentages:
Lifestyle/Living Expenses - 60%
Savings/Emergency Fund - 10%
Retirement/Investment - 10%
Enjoyment Money - 10%
Giving Back/Education - 10%
Now these percentages can change depending on your personal situation and with the help of a financial advisor you can get a breakdown that fits you perfectly. The most important part is that you stick to a plan and you stay consistent to that plan. Paying your future self will pay dividends down the line, literally and figuratively.