How You Group Expenses can Totally Transform Your Finances

People have classified Expenses into different types, for as long as expenses have been around (and that’s a long time!). But different people have different ideas about how they like to group expenses. For example, you might group them as Essential vs Discretionary, or Needs vs Wants, Personal vs Business, or whatever else fits in with your way of thinking.

Or you may like to break them down into categories, For example: Food, Accommodation, Transport, Utilities, Communication, Insurance, and so on. You’ve probably done something like this yourself.

You get to see a more detailed view of where your money is going when you do this, and that might help you identify areas where you could be doing better, BUT it’s not the key to getting in control of your money.

When I was in my twenties I had categorised all my expenses, and I had bank accounts for every different category. Every payday I would split my income up into those accounts, based on my categories. BUT, it really didn’t work that well. When I needed money it wasn't always there. By the time I was in my thirties I was really beginning to feel the pressure of supporting a young family, and not being in control of our finances.

It was then that I recognised it would make a lot more sense to be grouping expenses according to their characteristics rather than their purpose.

What do I mean by that?

Well, when you group by characteristics you’re grouping expenses according to their predictability and frequency, rather than by what the money gets spent on. So, instead of my accounts storing money for similar expenses, I used them to store money for expenses with similar behaviour.

BOOM. Instantly things changed for the better. Because all of my predictable expenses were now allocated to one dedicated account, I was able to predict future balances quite accurately for that account, and that allowed me to know on any given day what my bills account balance NEEDED to be. I could compare that with what it actually was and know instantly how I was going. All of a sudden we could go shopping knowing exactly how much we could spend. No more accidental overspending, and yet at times it also allowed us to deliberately overspend, knowing we would catch up before some large bill arrived leaving us embarrassed.

If you log into your banking app right now, you will see how much money you have in each of your accounts, but if you don’t know how much money should be in them, you’re pretty much flying blind and just guessing your way. Making the switch is what totally changed my life and it set me on a mission to start teaching people HOW they can change their finances like I did all those years ago.

Instead of budgeting based on expense categories you should switch over to expense characteristics. It will change everything!

Visit Spending Planning dot com to find out how to do that. We have a simple software application available that makes it so easy.   

Get excited. You can change your finances right now. In as little as an hour you should be able to set up your Spending Plan and it will change everything. My last 6 episodes about the 6 types of expenses will help you to put it all together.

Take Control of Your Finances

If you can take control of your spending by making some of the little changes above, you'll put some breathing space between you and your money stress, allowing you to relax and start building a stable financial future for your family. How many expenses do you accept in your day without question, and where could you reduce your weekly outgoing money just by changing a few habits? If you just can't get your head around that and/or you are tired of money stress and have decided it's time to take control, talk to a Spending Planner to find out how you can break the cycle. BOOK A FREE CALL

You have nothing to lose and lots to gain. Spending Planners are non-judgmental professionals who are trained to help. A short relationship with a Spending Planner will provide you with tools and training that will benefit you for the rest of your life!            


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Creating your own personal Spending Plan will be one of the best things you ever did.

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