Managing money is a lot harder than making money – it sounds counter intuitive, right? But, it’s more challenging because we need to lead our money rather than being led by it. We need to tell our money where to go. And if we want our money to work for us, we actually have to be very intentional about giving it a job title. 

This read is all about allocating your income effectively. It’s underpinned by the following 3 principals – so if you remember anything, let it be this:

  1. Habits create structure
  2. Structure creates systems 
  3. Systems create wealth

3 STEPS TO ALLOCATE YOUR INCOME

UNDERSTAND YOUR PRIORITIES

Gain awareness of how you are currently spending your income. There are some fancy ways to do this, but a good old pen and paper works perfectly. Download your bank statements for the last 3 months and see what trends emerge. 

If you’d like to track it on a spreadsheet, I’ve put together a free and easy-to-use budget template for you.

What is important to you and where does your focus need to be in the short, medium and long term? 

Do you need to build up an emergency fund or maybe cut down on some debt? Are you saving up for an overseas holiday trip? Remember, our basic needs (food, housing costs, clothes) and insurance (medical aid, income protection) should also be considered in this step.

Whatever it may be, your priorities are exactly that… your priorities. It should reflect your values and ultimately what is important to you. 

The last step is just a little maths. Work out what percentage of your income needs to be allocated to each priority. The pie chart below can be used to guide your thinking. 

chart showing how to allocate your income

If you’re serious about having a healthier money life reflective of your priorities and values, the time to take action is now. 

A Personal Finance Starter Pack may be exactly what you’re looking for.

It’s a two session experience to get you comfortable with the fundamentals of Personal Finance to help you manage your money rather than it manage you. 

If you’re like to learn more about Starter Packs or how I can help you reduce the stress the feel about navigating your money life, I’d love to offer you a Free Clarity Call. Hit the button below to book your free session. 

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