What Do Rich People Have That The Poor Does Not Have Apart From Money? The rich has money which the poor does not have but aside that, there are other urbane possessions of the rich that the poor don't have and I will just write on10 of such. The rich has money because they have learnt how to make money flow to them effortlessly but the poor would never know or do that These other urbane possessions of the rich include: 1. Wealth Mindset The rich has learnt that his mindset is everything and thus he guards jealously never allowing weeds and negative thoughts to live therein and making every effort to avoid the victim mentality. But the poor has accepted his condition as his fate and thus makes no efforts to extricate himself from the poverty pool. 2. Personal and Financial Discipline The rich has taught himself both physical and financial discipline. He does not speak out of tune, he has a cultured mannerism, is often courteous and humble. He also...
Know Your Budget, Know Your Expenses
How
to Plan for and Cut Four Different Types of Expenses
Knowing your spending is a huge step toward getting a handle on your budget.
You could believe that expenses are just that: expenses.
It's an expense if money is being spent. However, at Wealth Is Earned, we divide your expenses into four categories: fixed, recurrent, non-recurring, and whammies (the worst kind of expense, by far).
What are the many types of expenses and why are they important?
We're grateful you inquired.
Let's get started.
What is a Fixed Expense, and how does it differ from a Variable Expense?
The types of expenses that most individuals consider when creating a budget are fixed expenses.
They
are monthly expenses that occur on a specific day and for a specific amount.
Fixed
expenses include your mortgage, mobile phone bill, car payment, gym membership,
utilities, and Netflix subscription. Consider your fixed expenses, such as your
bills.
While not a monthly charge, weekly expenses such as childcare, dog walking services, or housecleaning are fixed expenses. They happen on a set day and for a set sum, even if the withdrawal occurs several times in a month.
What is a Recurring Expense, and how does it work?
Recurring expenses are sometimes known as day-to-day expenses.
They are the types of expenses or purchases that occur over the course of a month.
They aren't as predictable in terms of dates or quantities as fixed expenses, but they always happen.
Groceries, gasoline, eating out, and Target runs (who can resist a Target run?) are undoubtedly some of your recurring expenses.
What is a Non-Recurring Expense, and how does it work?
When it comes to sticking to a budget, non-recurring costs are the ones that trip individuals up the most.
These non-recurring costs may be encountered about once or twice a year.
However, when they strike, they can strike hard, so failing to account for them can be an expensive mistake.
A water bill, auto registration fees, or your Amazon Prime membership are all instances of non-recurring expenses.
Non-recurring expenses, on the other hand, aren't merely invoices.
Clothing,
shoes, and other items are examples of annual or semi-annual expenditures that
you make and need to make.
If you live in a state where the seasons change, chances are you replace your clothing at least once a year. Budgeting for semi-annual pool upkeep may be a one-time investment for our clients in warmer climates.
What is a Whammy Expense, and how does it work?
The most aggravating type of spending is a whammy. The majority of these are unpredictably unexpected.
Though you may not know when they will come around or how much they will cost you but when they do occur, you definitely shall be in the know.
Consider the following worst-case scenarios:
Your
vehicle is totaled.
When
your roof begins to leak, you realize you'll need to reshingle the entire
structure. You owe hundreds of dollars more in federal taxes than you
anticipated. These are unplanned charges.
Do you believe in Murphy's law?, then you will know that it's not a question of if, but when.
At
some point, the whammies will catch up to you.
How to Plan for Various Types of Expenses
It's one thing to understand what these costs are and another to understand how they affect your budget.
When it comes to budgeting, each of these expenses must be approached differently, especially if you want to cut any.
How to Save Money on Fixed Expenses
Fixed expenses are often the simplest to cut from your budget. I can't tell you how many times a client has been astonished when we ask them to analyze their monthly spending.
We
have a lot of consumers who signed up for a "free" month of an online
service and then forgot to cancel it, so they are now being charged for that
monthly fee.
Also, these monthly amounts may fluctuate without your knowledge.
Prices
for cable or internet service can rise without warning, and unless you keep
track of your fixed expenses, you may not notice or remember when the
introductory deal expires. If a price increases, you may be enticed to shop
around or phone for a better deal. However, you will only be able to do so if
you have a strong handle on your fixed expenses.
Another result of going over all of your fixed expenses is that you may see some overlap. If you have Netflix, Hulu, Sling, or HBO subscriptions, If you're aiming to reduce your fixed costs, removing one of those services can make sense.
How to Reduce or Eliminate Recurring Costs
Because recurring expenses are less predictable, they appear to be more difficult to eliminate. They are, nevertheless, the expenses over which we have less control. If you start tracking your grocery expenditure in an online program like Personal Capital or Mint, you might be astonished to learn that your average monthly grocery bill is around $1,000, when you believed it was closer to $800.
Most people struggle to keep these costs under control.
This is the technique we recommend to our clients: use cash.
When you pay for your recurring bills with cash, you can literally feel the money leave your pocket, making it more difficult to part with it.
Plus, because you'll see it, you'll know when you're getting close to meeting your monthly budget. Online software does not allow you to reconcile your spending. You simply take out your wallet and begin counting your money.
Getting
the hang of using cash requires some practice.
How to Cut Non-Recurring Expenses and Plan for Them
Non-recurring
expenses can be more difficult to cut. After all, you can't negotiate a lower
Costco membership price, refuse to pay your water bill, or persuade your kids
to quit wearing holes in their pants. You can tell them that last one, but
you'll still have to purchase them new jeans in the end.
So, when it comes to non-recurring expenses, it's more about planning to ensure that they don't feel like a slap in the face when they arrive.
Multiple savings accounts are the most effective way to plan for non-recurring expenses.
Having a savings account for each type of non-recurring expense means you'll be able to pay for it from your savings account rather than your monthly income when the time comes.
Let's say your water bill comes twice a year, and each time it's roughly $500. Your goal is to start a savings account that contributes a small amount each month to that bill. Calculate how much you'll need – or your best estimate of how much you'll need – split that sum by 12 and set up an auto-transfer every month.
Instead of coming up with $500 twice a year to fulfill that bill, you save about $80 every month in a savings account.
You
can open multiple savings accounts with several internet banks.
How to Prepare for Whammies
You'll be quite saddened to know that you won't be able to. Well, not quite.
Whammies are whammies by definition.
It's
difficult to forecast them.
An emergency savings account, on the other hand, is the simplest approach to reduce the effect of a wallop.
This emergency savings account is distinct from the several non-recurring spending accounts you've established.
An
emergency savings account should only be used in the event of a genuine
emergency. It acts as a safety net after you've suffered a financial setback.
It's not supposed to make up for the fact that you forgot to budget for new tires (a one-time investment) despite the fact that yours had already accumulated 50,000 kilometers.
When should you go into your emergency fund, and how much money should you set aside? Our recommendation differs from the typical "3-6 months of costs" response.
But this brings us back to the importance of establishing a budget.
We typically remark that when we create budgets, we're budgeting for 80% of your expenses. We won't be able to plan for everything. It isn't possible. That isn't how life works. However, if you've budgeted for 80%, the remaining 20% becomes much more reasonable.
Thank you for reading
Do
share with us, What was the last expense you cut or eliminated? Tell us in the
comments.
Want to get a better handle on your expenses and get a plan for your money while you’re at it? - We are just an email away, you can contact us
We will help you through our one -on-one coaching session to come up with a plan for all your expenses and which will definitely transform the way you think about your finances.
About the Blog
Wealthisearned is owned by
Topitup Media and Communication Nigeria whose Team Lead is Dr. Jerry - the
First Oguzie: JP
About the Writer
Dr. Jerry - the First
Oguzie is a Physician, an Author, a Writer, Thinker, Founder, Convener and
success coaching addict. He is passionate about helping people become the best
versions of themselves through coaching, mentoring, teaching, enlightening and
enhancing their self worth. And the Platform he uses to reach out to people is
his Ministry of Encouragement (MoE). He
has deep interests in Personal Development including mindset reset and habit
change, Personal Finance, Wealth Creation, Health and Fitness. He believes that
financial knowledge (literacy) combined with self - discipline is the key to
achieving financial freedom.
He is the author of ThePractical Steps To Total Financial Freedom -
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Thank you
The post is about savings and budgeting and knowing the different types of expenses one makes.
ReplyDeleteThere are basically 4 types of expenses one makes namely fixed, recurring, non recurring and whammies.
Knowing these expenses and effectively planning for them is key to financial independence
2. Savings
Investment
Emergency
Giving out
Personal
3. Three: savings/fixed deposit.; Emergency; Investment; personal/every day account
4. Knowing your expenses and keeping track of them. Save towards them
This post summarily talks about the different kinds of expenses and how we can adequately use each in other to avoid financial scarcity easily. This is because he who fails to plan his finances is planning to fail seriously.
ReplyDeleteThe major four categories of expenses herein are : fixed, recurrent, non-recurrent and whammies
2. Expenses account
I've an acronym for mine. "TCEPIS"
T -
C - Crypto 10%
E - Emergency Fund
P - Personal Development
I - Investment
S - Savings
Paschal hyginus
1. Budgeting is an important aspect of life. Though difficult but with easy steps and determination it is achievable. Firstly know the kinds of expenses we are faced with is the first step. There are fixed, recurring, non- recurring and whammies (just heard that name for the first time) but this is the worst type of expense.
ReplyDeleteFor the fixed expenses, cutting down on some payments, like multiple Tv subscriptions and all.
Recurring expenses can be handled if proper tracking and cash payments are involved.
Non recurring and whammies can be handled with opening savings account.
2. My expense account
Funding my savings account
Phone bills
Electricity bills
Medical check ups
Purchase of food items and groceries
3. 4 bank accounts
Zenith bank handles my expenses
Access bank for savings
GTB for fun (eat outs, trips, hangouts)
Polaris for savings geared towards real estate investment
4. Keeping a track of how much you earn, save and spend.
Goodmorning!
BUDGET as is written here is just an inalienable part of life. No one makes a decent financial life without recourse to it. Budget which is an overview of financial plans for an individual puts him/her into the stream of wealth making, it is actually a discipline that must be imbibed to launch a decent financial lifestyle.
ReplyDeleteMonthly expenses on monthly basis:
Subscribption of monthly data.
Cable subscription.
Family monthly medical check-up.
Electricity bill.
Food stuffs.
Churching activities.
Miscellaneous.
I have 3 accounts viz;
Savings in Union Bank. Used to run the day to day activities of the home.
Access bank account for business and wealth generation.
UBA used for fixed savings which is exploited at the end of the year. This money is basically used to get new wardrobe for the family, run the end of the year/new year seasons and more.
To hit the plateau of financial independence and freedom; I have critically imbued in me, stock taking of my expenditures, I analyze them spot on and weed out those which aren't worth it. Before embarking on any expenses no matter the status; I always have on the spot assessment and holistic review.
The times aren't favourable financially, so we are adopting the serpentine belt.
Thanks sir once more, have a great running.
The post is about streaming your finances ,able to distinguish between your expenses, the expenses that we plan every month is the fixed expenses, the recurrent expenses are the ones the we routinely spend on without putting them on our budget ,the non-recurring ,they are ones that stuck as without we occasionally spend on and the whammies are the ones that stuck as without anticipating their coming and this blog post provide us with remedy to curb these unforeseen events ,I personally apply the principles taught in the millionaire mindset that is I have created six account s that is the financial freedom account where I deposit 50% of every income received ,10% into play account ,10% into Savings to spend account ,10% into educational account ,10% into necessities account,10% into gives account to cover up my savings and expenses.
ReplyDelete1. For one to know one's expenses,one has to be on top of one's game with one's budget. This requires planning ahead of time and Discipline too.Any activity that makes one to spend money is expense. Expenses are divided into four categories (a) Fixed : Mostly the expenses considered when creating a budget and occurs on a specific day and for a specific amount eg mortgage,phone bill (b) Recurrent: Basically day to day expenses eg Gasoline, eating out (c)Non-recurring : Usually encountered once or twice and usually strikes hard & (d)Whammies: Unpredicted and unexpected eg leaky roof that may warrant re-roofing the whole house. Each of the category has it's perculiar characteristics and proven ways of reducing it. 2.Headings of my monthly expense account: **Paying myself/Savings *Tithing & church expenses *Data subscription *Household expenses**Contingencies. 3.I have four bank accounts : *Salary Account *Savings Account *Household Account & *Investment/ Retirement Account. 4.One thing to do concerning my expenses if I really desire to hit the plateau of financial Independence and freedom is to spend less than I make while saving and investing. This will ensure that at every point in time, I have up to three months expenses at hand.
ReplyDeleteIt cannot be overemphasized that budgeting is a fundamental necessity for the development nations as well as personal development. The adage remains true that he who fails to plan, plans to fail. Although, in reality it might be difficult to live strictly according to ones budget because of moment of unforeseen circumstances. Yet still, budgeting and sticking to same has the potential to save one from the day of doom and emergency. This article is primarily important and timely, and therefore, I want to commend the Convener Dr. Jerry De First Oguzie, JP for his great work. It is my hope that we shall find the piece helpful as it is practicable. Thank you.
ReplyDeleteone has to know how his money is spent within the month this this is to enable effective planning of expenditure vis vis income because without planning one is bound to fail .There are many classes of expenses within the month,we have the recurrent and none recurrent and not recurrent expenses ,the fixed expenses and the whammies expenses .at the end of the month one should be able to do an evaluation to know how much money is spent on each sub head to plan for the incoming month.This is to ensure there andis no waste and to ensure financial independence independence because it is not how much one ends that matter but how much we save
ReplyDelete1.Cut your expenses and save your life.This post summarises the different types of expenses and how you can minimise the deleterious effect on my financial health and your financial health too.
ReplyDelete2.Fixed expenses eg mortgage payments for my house,debt payments, car payment, mobile phone payments, utilities,rent etc
Recurrent expenses eg groceries, gasoline,parents medical check up
Non Recurrent expenses eg water bills,pre paid electricity bills, auto registration
Whammies eg car emergency problems, unplanned emergency surgeries/ treatment for self and family members
3.6 bank accounts, 1 current account and 5 savings account
4.effective budgeting is important for me to cut down my expenses, repay my debts and start living a healthy financial life.
1. Expenses, budgeting and savings. The post is actually how to manage our various expenses depending on the means you choose to take. There will always be expenses, but the most important thing is learning how to manage them so it does not overwhelm in the process.
ReplyDelete2. I really do not have a definite expense account for monthly basis precisely.
There are few expenses that recur which I can manage such as
Data = 6k
Calls = 3k
Feeding = varies
Transport = varies
3. I have 7 different accounts but not in active usage. My bank account opening are usually based on demand like office and all that. I only use 2 of those accounts actively not because of any special features, but because of ease of transactions. I actually don't have any classification of bank accounts because I don't keep money in the bank just for savings, I invest instead of just keeping it in the bank. The only money I have in the bank os just recurring expenses like feeding, transport, emergency and all that.
4. I think one the major things we can watch out for are those expenses we do in the course of the day that are not usually necessary. Example, most people spend a particular amount on a daily basis on something that can actually forfeit like ordering for snacks, trying to add unnecessary things during the meal, taking multiple bottles of alcohol on a daily basis, chocolate, ice cream and all that. If you really want to cut down your expenses, what the things that you acquire for that is not in the plan. I actually do not believe there is anything like budget because we tend to spend more than what was budgeted for. Investment should be encouraged instead of just keeping money in the bank because the interest rate for fixed deposit account does not really it.
One of the things I have tried to cut ny expense on is the cable subscription, I have actually been using the money to buy books for myself and I am happy doing that.
Thank you for this POWERFUL reminder about expenses and ways to cut it down.
1. The post, know your budget, know your expenses is talking about budgeting. And in it four types of expenses were identified which are Fixed expenses; the type of expenses we know monthly with their amounts and dates, recurring expenses; which are not know but very important as they compulsory, non-recurring expenses; which are the expenses which doesn't come up monthly and the whammies which are emergency expenses. Knowing this and how to budget for them will help one to at least figure out 80% of the expenses he/she will encounter monthly.
ReplyDelete2. House running: here monies for subscription, generator fueling, gas, foodstuff and groceries, drinking water, electricity etc.
Car Fueling
3. I have 8 bank accounts
A. Salary account
B. Project account
C. House running account
D. School fees account
E. Church donation account
F. Miscellaneous account
G. Charity account
H. Emergency savings account.
NB: I don't have for healthcare bc it's catered for by my company for my entire family and for long term savings I use Insurance Savings policies.
4. You need to put them in check and constantly forgoing the wants. Also discipline is required in money matters.
Thanks.
How to plan for and Cut four different types of expenses.
ReplyDeleteExpense is when money is spent & wealth is when money is earned. 4 types of expenses are fixed, recurrent, non- recurring and whammies.
It's a thing of value, to understand cost & how it affects budget. To reduce cost these expenses must be approached differently when budgeting.
Keeping a track record of your fixed expenses would reveal alot. Having a strong handle on your fixed expenses is the way.
To reduce your recurring cost, buying with cash is adviced but it takes a lot of practice to handle.
Having multiple savings accounts is the Singular most effective way to plan for non- recurring expenses.
Whammies being difficult to forecast, the effects can be walloped by having an emergency savings account, which should only be used in the event of a genuine emergency. Planing budget for every expenses is not possible, but 80:20 ratio plan can make a huge impact.
2. Savings account
Personal account
Investment savings
3. I have 3 bank accounts
1 business account
1 Investment savings
1 personal account, the one I earn & spend from.
4. Make and follow a strict budget which should include savings for investments, after learning and Keeping track of your expenses.
Enekwechi Adaeze Faith
1) The post talks about how one can manage his/her various expenses and how to budget. Budgeting is a fundamental necessity for personal development, budgeting is an important tool in ones life although it can be difficult at times but with self discipline it can be achievable.
ReplyDelete2)savings,household expenses,church activities,data and Dstv subscriptions, contingencies
3)I have 3 bank accounts:i)my day to day activities
ii)savings
iii)business account
4)taking record of my earns, spend less and save more
1. Handling your budget and knowing your expenses also how to control them, which is categorized as (a),fixed : those ones you pay monthly/ weekly eg.subscription bills.
ReplyDelete(b) recurring ie day-to-day expenses, purchases that occur over the course of a month eg groceries etc.
(c) non recurring which be encountered once or twice a year eg auto registration fees and lastly
(d) whammy expense are those not predicting cost that can't be overlooked eg roof leakage.
2. Groceries,fueling of car and gen set,savings , emergency, tithes and data.
3, 3
Savings, expenditures,fixed
4, keeping track of my expenses, reducing or eliminating some, having multiple savings accounts while having multiple streams of income.