The Four Account Budgeting Method

A budget is a financial plan that documents your income and expenditures. Now I know what you are thinking… okay, who cares about that? Well, you care about that. If we are truly honest with ourselves we can admit that money is an important topic. It allows us to live out our dreams such as owning a home or traveling the world or condemns us to a hellish nightmare filled with an account over drafting and foreclosure. Either way, money makes the world go round. If you are reading this article you have already figured that out and you are looking for a plan to make your money work for you.

For the last year, my budget has consisted of an excel document and four accounts; and this method has allowed for me to pay down debt, save some MONEY, and most importantly pay all of my bills on time.

I break up my income into 4 separate bank accounts: Personal Spending Checking, Primary Savings, Supplemental Savings and Bills Checking.

Personal Spending Checking consists of groceries, gas, takeout, gifts, medications, and any other miscellaneous spending I may have. I also let money rollover from month to month; this gives me a sense of control and allows for me to still make special purchases even though I’m on a strict budget.

Bill’s Checking consists of rent, electricity, insurances, telephone, debts and internet. This account houses the money for any of bills for the household or day to day living fixed and variable expenses.

Primary Savings is an account where I save a specific amount from month to month and I consider this money untouchable. This money is set in stone and is my way of saving for the future while also maintaining my budget.

Supplemental Savings is an account that is used only for emergencies or to supplement for a bill that was higher than I originally planned for. For example, my electricity is typically 125.00, but during the winter months it can increase to 200.00, I would use this savings to supplement that bill and this element keeps me on track and in the green with my budget.

Taking control of your finances is an excellent way to start off the New Year. It will help to eliminate money as a stressor and I believe we all could do with a little less stress in our lives. The main benefit of this budget is that it allows you to divide up your money into different categories and this step creates a better understanding of where your money is going and how you manage it better. I challenge you to try it out, what have you got to lose?

#budget #money #bills #savings

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