Syndicate
Dividing Up Your Expenses
Overcoming the inertia to make the decision of paying ourselves a part of our paychecks before paying off our debts, is a very difficult thing to do. If we leave this until the end of the month, most likely we will not be willing to do so because the marginal value of the last dollars that are left in our pockets at the end of the month, have a very high value for us for the simple reason that it is all that we have left! Because of this when a person gets into the work world, taking into account how difficult it is to put into practice saving, and on the other hand, considering that in this stage of the life of young people they usually form a home and need to dedicate their attention to consolidating their relationship as a couple, it is suggested to choose an automatic savings fund. This will also allow that person to achieve the objective of forming a capital, disposing of more tranquility to dedicate all their energy in the family and work plane during the first ten years. An automatic savings alternative is to ask the employer to take out a monthly amount that you determine and deposit it into a savings account. In order to be able to save, we should not interfere with the amount of debts verses the income. We need to keep certain relations studied. Depending on the income, habits and the standard of life of each family group, it varies, but it can be established with some good common sense, an amount such as the following: a) ten percent goes towards savings, b) twenty five percent goes towards rent or house payments, c) twenty percent goes towards interests, loan amounts and emergencies, d) forty five percent goes towards the upkeep of the house. The key to success in this system resides in that once the money has been distributed and is assigned to an amount for the expenses of the house, alt he expenses, starting from the dog food and toilet paper, will have to come from the amount that is left, because there will not be anymore money until the next month. That is all the money that person will have until the following month.
When we are able to do this, we will feel a sensation of relief and control. The self deceit and games will be over with. What we have as income minus the bills, including savings, constitutes the automatic salary and limit of our finances until the end of the month.