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Finances Made Easy

Updated: Jan 11, 2019

As we said in “Master of my time”, our practical guide to a simpler life, TIME is one of the most valuable resources we have and together with another very important resource MONEY, both we tend to waste.


These resources may seem to be so abstract, and yet, they influence our daily existence.

If you want to optimally manage your time to do the things that give you the greatest pleasure and happiness, we invite you to apply the Japanese method of the “5 S” to your home life, which acts as the main basis where everything starts and read our practical guide “Master of my time”.


This method can also be applied to many other areas of our lives such as our finances. Our finances need to be nurtured in an organized way, they build our relationship to MONEY, and like time, we want to have money to do the things we dream of when we have the time.


Have you ever run out of money before the end of the month and still needed to purchase the basic products and maybe even have a few bills on the table needing to be paid?


The aim of this all is to organize our finances in such a way that we can cover our expenses AND save money to spoil ourselves.


To start, it is important to know how much money we have, where we spend it and where can it be saved? Giving it the importance it deserves to achieve financial freedom, is our main goal.


Let’s follow the method and see how can we apply this easily to how we deal with MONEY. Before we start doing this step by step, however, we need to “see” how much money we have and how much we spend.


To begin you will need to invest a certain amount of time to do this work, but you will only need to do this once. This “Preparation Step” is the most important thing to do if you want to attain our goal.


Using the chart below make a list of all the income sources you have, try to remember all types of income you have, even the smallest one. Then allow yourself to mention all individual expenses you have, small and big (everybody has different types of expenses).


My suggestion would be to start by determining the following:


What type of expenses do I have?


. Fix costs (this are monthly or yearly payments, usually for the same amount. For example rent, mortgage, retirement pension contributions, children’s school fees, etc.)


. Variable living costs (these are changeable costs and some of these you can decide on i.e. taxes, groceries, medical costs, TV, subscription satellite channels, internet, music streaming sites such as Spotify or similar, going out, subscriptions for magazines, newspapers, clothing, sports or gym, hobbies like: painting, playing an instrument, pottery, beauty and body care, car or transportation etc.)


. Sporadic costs (these are more comfort and pleasure costs, i.e. going out: drinks & food, theatre or concerts, babysitting, gifts for friends, traveling, dentist fees, bigger investment projects, etc.)


Income 1st Month 2nd Month 3rd Month All Months


All income from sources_________________________________________________


TOTAL INCOME _____________________________________________________

Fix costs: 1st Month 2nd Month 3rd Month All Months


Rent, mortgage,

Utilities, school fees, etc._________________________________________________



Variable costs: 1st Month 2nd Month 3rd Month All Months


Taxes,

groceries,

medical costs

TV/subscriptions

(internet,music, gym, etc.)

beauty & body care, transportation, etc.____________________________________


Sporadic costs: 1st Month 2nd Month 3rd Month All Months


Going out to drinks & food,

theatre, concerts,

babysitting, gifts,

traveling, bigger investments, various unknown, etc.____________________________


TOTAL EXPENSES: ___________________________________________________



EXAMPLE

Income 1st Month 2nd Month 3rd Month All Months


All income from sources_________2000_________2200_______2000______6200__


TOTAL INCOME ________________________________________________6200__

Fix costs: 1st Month 2nd Month 3rd Month All Months


Rent, mortgage,

Utilities, school fees, etc.__________1000_______1500________1000______3500___



Variable costs: 1st Month 2nd Month 3rd Month All Months


Taxes, 100 100 200

groceries, 175 150 150 475

medical costs 120 120

TV/subscriptions 50 50 50 150

(internet,music, gym, etc.)

beauty & body care, transportation, etc.____________________________________


Sporadic costs: 1st Month 2nd Month 3rd Month All Months


Going out to drinks & food, 200 220 220 640

theatre, concerts, 100 110 50 260

babysitting, gifts, 75 50 50 175

traveling, bigger investments, various unknown, etc.____________________________


TOTAL EXPENSES: _______________________________________$5,520_______




Now that you have the list of all your income and expenses let’s play a little bit. Take your time to find out and write down the amounts you have received and spend over the last three months, it does not have to be exact, but try to be as honest and accurate as possible.


But how do I always know these amounts? Sometimes you have used your credit cards for purchases: groceries, taxis, cinema, bookstore, restaurant, takeaways, etc. So, check on the statements of your bank accounts and credit cards from the last three months and list/add the expenses of the same category. Of course, there may be times when you spent cash and have no idea how much you spent on what! You will, however, be able to see “cash withdrawals” from the ATM. In this case, try not to get confused or frustrated, it does not matter. Just estimate more or less what you remember you might have spent the cash on. The forgotten cash payments can be put in the category “various, unknown.”

Now, that you have completed the “Preparation Step” you have a more accurate knowledge of how much money you have and where your money was spent.


You will now be able to complete the method by following the Practical Implementation of the 5 steps consisting of the selection, sorting, organizing, maintaining, simplifying and creating a habit. The question is: How do I do this?


I will be sending a step by step blog each Tuesday in January that will lead you through this process. Please be sure to follow my website/blog at https://www.masteringmytime.com/insight-news so that it can be delivered to your email

address each week. In the meantime, keep your chart handy and adjust as you think of items that should be added.


Thank you, and I look forward to helping you with this process.