One of my key take-aways is how millionaires have devised a way to budget their money so they are able to grow it exponentially.
So how do millionaires budget their money? Let me walk you through the budgeting system that could change your financial life. I've recently started doing it even with only a few hundreds in my pocket.
1. Financial Freedom Account (FFA-10%) - This Account is where you put a part of your money that you'd be investing in the future. Be it stocks, mutual funds, bonds, forex, or real estate, what important is that this Account of yours remain untouched until you have found an opportunity to invest it. And by investment, we mean, that you should put this money where you'd most feasibly get a stream of passive income.
2. Long-Term Savings for Spending (LTSS-10%) - If you're planning to buy a new gadget (phone, tablet, laptop, computer) or a pair of new shoes to match your bag and belt, or jewelry, or watch, you get what I mean, don't just spend on them just yet unless you have saved enough to satisfy your shopping needs. And yes! If you have increased what you have saved in this account, who's to say you won't get another car or even a house or your planned around-the-world cruise in no time? (Although I suggest if you're going on vacation to explore the Philippines first!)
3. Education (EDUC-10%) - If you're not learning, you're dying. At one point you will have to grow. Use this account for your continuing learning. Are you planning to take a Master's Degree? Or a PhD? Or perhaps take classes in painting, singing, dancing, photography and other stuff that floats your boat? You can use this to help you advance professionaly in your career or simply help you grow as a person. In my case, I'm starting to fill this jar because I want to take the Quantum Leap next year.
4. Necessities (NEC-55%) - This is your operations fund. Food, gasoline, bills or regular mortgages get into this account. If you find that 55% of your income can't support your regular needs, then you must simplify your lifestyle. You might want to cut on your Starbucks for a little while. Just remember that long-term goals require commitment.
5. Play (10%) - This account is my personal favorite. The best thing about this is that you have to consume this all at once in one month! This is to prevent you from getting so guilty for thinking that you're depriving yourself because you've been saving the other 95% of your income. If you're a spender, it'll be a challenge for you to keep this intact for a month. If you're a saver, you might have a hard time spending this because guilt for you might be the other way around. In one of the stories shared in the training, there was a girl who was so broke she only had 10cents for play. Know what she did? She treated herself with a piece of candy. It wasn't so bad she said. So you see? It's possible.
6. Give (5%) - It's not in the picture, because I've given it! Give back to your church or any charitable institutions of your choice. Or simply give to anybody you feel might be needing your help. Does your pastor like a bicycle? Or maybe feed a street child outside your favorite vegan restaurant! (I'm vegan by the way. :))
The idea here is that no matter how much money you have, you have got to start with something. This budgeting system is a good way to start and I believe that because I've heard first-hand how Mac and Thaddeus (our speakers) stuck to this system as they shared to us their walk before their talk.
If you want to know more about Millionaire Mind Intensive, visit www.laurus.ph or www.srpl.net.
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