Financial Journey - Pay Me First
I began a financial journey 2 years ago. I wanted to be able to better handle my finances and be able to have the ability to live stress free of money. I want to have a positive flow of money every month. It began like any other journey. I could keep going the way I am going, and my struggles will get more difficult as I haven't learned the lesson(s) life is trying to teach me at an easier stage. Or, I could begin understanding how it works, what is the information and knowledge I need to learn, how do I create and make this possible. It really came down to owing the tax man a large sum in taxes (5000 that year) and wanting to not be in the awful cycle of always owing a large tax bill at the end of the year. I really started with a book my Granddad recommended to myself and all of my cousins either at 13 or when we got our first job, 'The Richest Man in Babylon' By George S. Clason. Like all kids thinking they know everything and it just didn't interest me to read at the time. I enjoy reading and as any reader, I have a bookshelf of books to be read. I put that book down never to be touched again. I have discovered my challenges of never been able to complete a business, self help or knowledge growth book. I always seem to glaze over or lose my place as I get thinking about the topic being read about. I am a great listener. I have learned my learning style is in audio format. I can absorb the information greatly and be able to reiterate it easily. Fast forward to 2 years ago, looking for something to listen to on a road trip, I downloaded the audiobook. I think I listened to it 3 times over that road trip. It was great. Simple story line style with extremely easy to understand how to. "The Five Laws of Gold" point out the first and foremost, of paying yourself first. 'Pay yourself one tenths of everything you make so you have some coins to jingle and begin to build your wealth.' It goes to teach the lesson of building and creating wealth, and more. For today, we will cover this idea. Creating the idea that 100% of your take home money is then divided into where it should go. I created the outline of my budget and making sure I am able to pay all my bills. I have tweaked it a few times as things change and shift. Using pen and paper, and envelopes, I created my system. I am not perfect and have fallen off the habit, going back to old bad habits, paying what is next. In the book, it said to next set aside two tenths for repaying debts. Followed by seven tenths to cover expenses and other items. Here is a quick example. Yes you can do this in excel and bank accounts, or whatever your strengths are for creating you habit and sticking to it. It's about creating simplest and simple discipline creates extraordinary results.
Example:
Total In HST 15% TAX 40% ME 10% BILLS 30% LIFESTYLE 10% RAINY10% 1000 150 340 85 255 85 85
*Keep in mind, I am self employed. I receive full collection of fund, HST is taken from the total. The left over is the 100% of my take home. **I use the tax at 40% currently due to finish paying off pervious year taxes. Any extra that doesn't get sent for taxes, when I am finally caught up, is used to help my down payment for a property. *** I do sometimes flip the 40/30 categories depending on bills coming due. I will do a running total at the end of each week and deposit funds where they need to go. If the bill isn't due, it just stays in the account. If I make a payment on the bill, I subtract that from the running total. I.e. At the end of the week my 'Me' has 500 in it. I typically make a deposit into my investment accounts and the running total will become zero. I hope you find this helpful. If you find yourself on a financial journey too, I highly recommend reading or listening to 'The Richest Man in Babylon'. It's a great book to start getting yourself in order and creating a simple system to create the life you want to live. Until next time, Tiffany
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