Personal Finance – A Simple Personal Cashflow Strategy to Follow
Simple personal cash flow management beats out complicated every single time. You’ve probably met your share of people who have a lot of complicated knowledge about personal finance and all these ideas about how to achieve financial freedom, yet they’re broke or pretty close to it. It’s funny how this works, but when you think about it, smart people often have a very difficult time using their knowledge to create real life results.
This is because simple personal cash flow strategies are just a LOT more applicable to real life…especially when your commitment is tested. Let’s look at one simple personal cash flow management system that
The Four Buckets: A Simple Personal Cash Flow System
The four bucket personal cash flow system is so simple that once you get into the habit of using it, you can almost live off of it without having to refer to a written spending journal. It works like this:
1. Commit the first 10% of your income towards investing
2. Commit the second 10% of your income towards building cash reserves for the sake of emergencies or planned purchases.
3. Commit the third 10% of your income towards charitable giving
4. Commit the remaining 70% of your income towards living expenses.
Now, just a few things about the order here…don’t change it. One of the most common habits which broke people have is that they try to pay their expenses and then invest what’s left. This is a certain way to remain broke forever. If you want to start investing money towards building financial security, it MUST become a priority. If you think you can’t pay your expenses with only 70%, start with 5% in each of the other categories and work with that until you get your expenses down to 70 or less%.
However, don’t change the order, because that’s the secret to getting your financial habits turned around and getting out of the paycheck to paycheck trap. The other thing you might be tempted to change is the giving step. However, it might interest you to know that the marketer Dan Kennedy (also known as “The Millionaire Maker”) recently stated that giving was one of the most powerful wealth building strategies….so try it out before you dismiss it.
Keeping it Focused and Simple
I had mentioned that the four bucket personal cash flow system is so simple that you can almost live off of it without writing things down. However, you still need to keep a written spending journal if you want this simple personal cash flow system to work wonders for you. Writing down your spending will keep you focused and disciplined which is the key to long-term success in achieving financial freedom. You can start your simple personal cash flow system today and find out just how effective it really is.
Be successful!
Personal Finance – The Four Bucket System of Cashflow Control – Financial Freedom Made Simple
The four bucket personal finance system is the simplest way to control your cashflow and to begin building financial freedom. Many of us think that financial freedom is about having more money, and that certainly does help. However, it’s not until we begin to control the money that we have now that we get on the path to achieving financial freedom. Otherwise, we’ll make more and more money that we end up putting into a purse (or wallet) with holes in it. The problem is that many of us over complicate the task of controlling our cashflow, but the four bucket personal finance system makes it simple.
Here’s how: Why Simplicity is the Key to HUGE Success
The most effective systems in the world, those which empower people to achieve success on a large scale, are never complicated…they are simple. However, they do require a lot of work and discipline, which is the reason why so many of us chase after complicated and crafty solutions which will help us achieve success with little or no effort. Just think about the last time you read an advice book about success and said to yourself: “Okay, I must not be getting the whole story because that just sounds too simple.”
And off we go in search of something more sophisticated, which we think will get us there with a lot less work….in other words, the shortcut. What you’ll find is that the moment you stop looking for shortcuts and agree to take the simple path of hard work, you start building momentum and moving towards your goal faster. You see, the shortcut is the longest and most disappointing route to take when it comes to your personal growth and achievement.
So let’s look at the four bucket personal finance system and how it can make your journey towards financial freedom simple and rewarding.
What is the Four Bucket Personal Finance System?
The four bucket personal finance system divides your spending into four categories or “buckets” by which you prioritize your spending:
• Giving
• Investing
• Expenses
• Reserves (for future spending or emergencies)
Now, what makes all the difference in the effectiveness of the four bucket personal finance system is the priority of these four categories (this is where the hard work comes in). By putting expenses first, you can be assured that you’ll always be living and working JUST to pay your expenses. However, if you make investing or giving a priority, you’ll further increase your capacity to do both.
So no more shortcuts! You’re making WAY too much work for yourself. Use the four bucket personal finance system and make your achievement of financial freedom a reality.