In the past, I spent money how and when I felt like. I had no compass guiding how I spent money. In retrospect, this approach I would say isn’t sustainable especially when you start earning quite a lot of money.
I read a book that changed how I managed my expenses and I am really glad I did.
Here is a break down of how my expenses are being managed
I invest about 25% of my net salary into long/short term projects that will enable grow wealth on the long run. I divide the rest of the money as follows:
- Savings (15%) : Savings for sudden/emergencies expenses e.g surgery for self or a family member etc.
- Groceries (7%) : Used to purchase groceries and food stuff for the month.
- Tfare (10%) : Used in moving around/ fuelling fixing your car.
- Restaurants (5%) : Used to occasionaly eat out in restaurants.
- Health and Welfare (5%) : Get drugs, books etc.
- Entertainment (6%) : Netflx, Saving for Vacations etc fall in this category.
- Personal Care (4%) : Body/Hair Cream, Spray etc. fall in this category.
- Clothings (6%) : Clothes, Shoes etc. fall in this category.
- Bills + Utilities + Housing (30%) : House rents, electric, water bills.
- Givings + Dependencies (12%) : Support friends and family.
Most times, I don’t get to use all of the money in a month so I save the rest in a reserve space to use for other things in future.