Four Easy Personal Finance Expense Categories

Having easy finance expense categories can make it a LOT easier for you to stick with your personal budgeting commitment long-term. You know how it is when you try to put together a budgeting system, but you have 37 expense categories to look after. Who can live their life that way on a consistent basis without deviating from the system? It is almost impossible, and that is why the four bucket system keeps it simple when it comes to managing your expense categories.

Introducing the Four Bucket Personal Finance System

When you think about it, there are only a few major categories when it comes to budgeting: living expenses, investing, reserve spending and gift giving. Everything fits into one of these four categories or “buckets,” and so keeping these as your expense categories will make it much easier for you to stick with your commitment. How do you get started in using the four bucket personal finance system?

Start With Your Priorities

The first step to using the four bucket system is arranging the four categories according to your personal money management principles. For example, placing them in this order has proven to be very effective for people who want to build personal wealth:

1. “Pay Yourself First” (accumulating capital to create new wealth)

2. Living expenses

3. Contributions (includes charitable giving)

4. Reserve (building an emergency and special purchase fund)

This is backwards to the way that the majority of people manage their personal finance expense categories. Most people start out by paying their living expenses and investing what is left over…this is a surefire way to make sure that you never start investing.

There is an old saying that goes: “Poor people are poor because they spend their money and invest what’s left. Rich people are rich because they invest their money first and then spend what’s left.”

If you apply this principle in using the four bucket personal finance system, you will never miss the invested money. You will adapt to pay your living expenses without it, and this will put you on the road to building wealth and financial security.

So sit down with these four personal finance expense categories and apply the four bucket personal finance system to managing your income and outgo. For best results, put “Pay Yourself First” and start making your wealth building and financial security the number one priority.

Money Management With Your Personal Finance Planning Software

Millionaires are not rich because they knew how to make millions, but more significantly because they knew how to save millions. If you ask any rich person, he will tell you that he has been making efficient plans to save money effectively. This nature of ‘effective money saving’ is the best way to get rich. The money that you have saved will add up to your net worth and you will be getting richer every month.

The key to effective money management is efficient budgeting. Before a few decades, the process of budget was very difficult. People used to spend many hours with their pen and pare making personal budgets. They had to write down all the income and expenditure details and then make manual calculations on their budget.

But in today’s scenario it is much easier. You can very easily use your personal finance management tool to manage your personal budget. It is very simple to enter all your finance details and get your personal finance calculated by the software. This process is very easy. All that you need to do is a bit of data entry regarding your personal finance details.

With the new and improved facilities provided by the personal finance software today you can very easily manage your personal finance. You have complete freedom from the old pencil and paper method of making manual calculations. Your personal budget is the key to your secure financial future. If you need an excellent budget, you will have to make use of your finance software to the best.