Let's look at number two of the six types of expenses we all need to deal with in life.
If you missed number one (about weekly expenses like food, fuel, fun, and incidental expenses), you can read all about it HERE.
Now for number two:
Repeating Predictable Expenses - (Otherwise known as ‘Bills'!)
These fall into two groups:-
Rent, Electricity, Telephone, Rates, Insurance, Planned Gifts, Regular Donations, Vehicle Registration, Memberships, Children's Lessons, Dentist and other similar expenses
Mortgage(s) and/or Loan Repayments
These are payments or expenses you can reasonably predict into the future:
You know how much they usually cost with reasonable accuracy or you can nominate an amount that will work for you more often than not
You know how often they fall due within a yearly cycle
You know when they will occur next
If you do not know these three facts about an expense, it does not belong in this list.
These kinds of expenses can be challenging for many of us. They can feel overwhelming, and at times it can feel like we don't know where the money is going.
The good news is that these expenses are regular and predictable, making it easy to build a budget plan around them. In this article, I'll show you how to do that.
Where to Keep this Money
I recommend you open or identify a Bills Account to store this money in, and if you have a mortgage you might consider having it offset against the balance of your mortgage to save interest.
How to Manage this Money
It's pretty simple — you pay your planned bills from your Bills Account and ideally distribute funds from there to other accounts according to your budget plan.
For example, your weekly expenses money would be transferred out to your Day2Day account each week.
Your goals are to:
Pay all of these predictable expenses on time
Always have funds available when these expenses fall due (this does wonders for your stress levels!)
Use as little of your income as possible in paying these expenses (you have better things to do with your income than pay bills!)
Never have more savings put aside for these expenses than is necessary
The biggest reason people have difficulty with these expenses is that they have no plan and no targets to aim for.
To help you create your spending plan:
Calculate the total cost of these predictable expenses for the year ahead
Divide that total by the number of weeks (or pays) in the next year
You will then know what the 'per week' or ‘per pay' cost of these expenses is.
Looking Forwards Is Essential!
Doing the above will give you a really good start, but to totally take control of these expenses and reduce money stress dramatically you then need to lay them out on a timeline and calculate your day by day target bank balances for the next year in advance.
However you go about it you need to look into the future to generate your daily targets to aim for — that will make managing this group of expenses easy and stress-free!
Not knowing how much needs to be in your Bills account on any given day of the year makes it very difficult to actually have the correct amount available. It is very easy to get caught out by bills arriving when you don't have a plan in place.
Success with Money
If you think success with money is for someone else, think again! You deserve it as much as anyone else and I have helped thousands of people achieve it, so why not you too? If you think taking control of your money is all too hard, get someone who teaches and uses my system to help you...go to www.findaspendingplanner.com.
You'll find trained Spending Planners who are extremely passionate about helping people there. The benefit will be far more than the cost and it will be with you for the rest of your life!
Join the Team
If you are already using my system to master your day to day finances and would like to have more satisfaction in your life (and more income), you might want to consider becoming a Spending Planner as well.
Go to https://www.spendingplannersinstitute.com/become-a-spending-planner/ to find out all about the opportunity.
That's all for this stage. Keep an eye out for the next instalment!