CONTROL YOUR EXPENSES; BE PRUDENT AND WISE - KEY NUMBER SIX
Why do you think many mega-superstars in the entertainment and sports world become poor again after just a few years of attaining great wealth; or why do some heirs to massive family fortunes become broke and miserable just a few years their forbearers passed these on to them? Poor financial management blended with wild spending on super expensive luxury items is the unfortunate answer. It’s a recipe for inevitable disaster.
To save money, follow a planned budget, and spend wisely, it is critical to have a ‘controlled spending sheet;’ or whatever name you might want to call it. This is another thing the rich and successful do (even though most hire accountants to keep track of these for them) that unsuccessful people don’t. You can only master the game of money when you master yourself and how you spend what you earn.
Highlighted below is an example designed for a regular urban family.
S/N |
ITEM |
FLEXIBLE |
FIXED |
1 |
SAVINGS/INVESTMENTS/TAXES |
||
2 |
HOUSING (rent, mortgage, repairs/maintenance, equipment/furniture, operations/supply, insurance, etc.) |
||
3 |
UTILITIES (electricity, TV, gas, water, telephone, trash, etc.) |
||
4 |
INSURANCE (life, medical, car, etc.) |
||
5 |
EDUCATION/INFORMATION (tuition, newspapers, subscriptions) |
||
6 |
RECREATION (vacations, sports, movies, hobbies, etc.) |
||
7 |
CHARITY/GIFTS (birthdays, anniversaries, graduation, etc.) |
||
8 |
HEALTH (dental, drugs, surgery, etc.) |
||
9 |
CLOTHING (new clothes, dry cleaning, etc.) |
||
10 |
FOOD (meals out, meals at home, groceries, etc.) |
––––––––
While this chart may look rather simple, it is very powerful and efficient to help you control your spending. This is because you would, beforehand, known how much of each item demands how much of your income. This way, your commitment to saving and investing, as well as servicing debts would not be hampered. With a little dedication to budgeting and controlled spending, making money and mastering the game of money would become very easy and delightful.