We all lead busy lives and we want quick and effective ways to get things done. To make things work and stay on top of them we have to be organised.
The system that you are able to maintain is the system that works for you.
The Key
The key to any workable system is simplicity, something not too time consuming, and one that fits into our weekly routine based on our available time. If a system is too complicated, we may not be able to maintain that system.
Your incomes need to be greater than your outgoings so that you can control your finances. Working on a plan to keep everything under control will get you to a position where you don’t use credit cards. Practical Guide to Eliminate Credit Card Debt
Method
Implement a system to have a separate account for each area of finance we have to manage, by getting a savings account that is linked to a current account, will enable the transfer of funds between them. Separating out our paycheck gives us a clearer picture of all our finances and makes all areas easier to take care of.
Set aside a certain amount of money each month in your main current account as your disposable income. The illustration below, shows the break down of expenses and how they can be split across 4 accounts:
Salary (Paycheck) £2300 (Per Month)
| DIRECT DEBITS (MONTHLY) | AMOUNTS |
| Mortgage/Rental Income | £1000 |
| Car Insurance | £100 |
| Electric | £70 |
| Gas | £70 |
| Water | £40 |
| Total | £1280 |
| FOOD & OTHER EXPENSES | AMOUNTS |
| Food | £300 |
| Other Expenses | £200 |
| Total | £500 |
| WHAT’S LEFT | AMOUNT |
| Remaining Funds | £520 |
| 4 BANK ACCOUNTS | AMOUNTS |
| Current Account 1 (Expenses) | £500 |
| Savings Accounts 1 (Savings) | £300 |
| Current Account 2 (Direct Debits) | £1280 |
| Savings Accounts 2 (Contingency) | £220 |
NEXT STEPS
Get an easy to manage system in place that fits into your routine
Have different account for different areas of your finance
How do you currently manage your income?
Fantastic, I have learnt quite a lot, How to manage my financial system.