Happy Thursday! Hope your week has been wonderful so far!
When you assign places for your earned dollars to go you are taking control and placing value on your financial life. Basically assigning is just telling your money where to go and how to work for the benefit of you. This process of assignment requires that you desire a better financial life and a belief that through your money choices you can achieve financial freedom. When you make this assignment automatic it will save you money and definitely save you some time. Have you ever thought about why the government make paying taxes automatic and they draft it out before you even get your paycheck...mainly because they know that if it's not automatic then most people would not fulfill their tax obligation. Therefore you have to take on the same mental outlook when it comes to your personal and business finances.
A helpful tool when assigning your income is to create a spending plan. A spending plan keeps you on track throughout the assignment process. In simple terms it is:
MONTHLY INCOME(MI) - EXPENSES(E)
The first item of expense and most important is the amount that you will pay yourself. For some people this may be confusing if you are living a system of paying everyone else first. However, remember that the biggest bill you have is to pay yourself. You deserve minimum 10% of everything you earn therefore making this the first expenditure is the first step in building your wealth. You can read a previous post I did on the different buckets of your life, so you will know how to direct the amounts you are paying yourself.
Basically everything else left should go towards your other expenses like mortgage, insurance, utilities and other bills.
Finally you want to get to a point that you still have extra money at the end of your assignment process. Let's make a visual of this
MI - EXPENSES = OVERAGE AMOUNT
If you don't have an overage starting out then that's okay because that gives you a goal to work towards. However you will have to start evaluating your expenses and eliminating any bad debt. You may even have to find ways to increase your income. Once you have achieved an overage savings amount you now have options towards building more wealth.
As always thank you for stopping by and I pray that you have a wonderful and blessed weekend.
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