Financial Issue Part 2.

 Hello Everyone,

If anyone hasn't read Part 1, please click here to read first part. 

Continuing, Record all the transactions on monthly basis and at the end of the month or in the next month, whenever you got little bit time, categorize your expenses into:

Total Expense

Repetitive Expense 

Necessary Expense

Extra 

Total Expense: 

This includes all of the total expense you did for the whole month. All the grocery, extra food, gadgets bought, necessary, rent, unnecessary, etc. comes in it. 

Basically:  Total Expense = Repetitive Expense + Necessary Expense + Extra.

Repetitive Expense: 

This includes all of your expenses which occurs on a monthly basis or on a regular basis and will come every month. So, noting down this number will help you understand that how much you spending at-least every month. As, Rent goes every month, Phone bills, Grocery bills, Internet, Gym Membership, Netflix Membership, etc. This expense could be understood as a base for your total expense. It is hard to change this value as this includes more of a basic needs like food. Neither I can eat less food to make my expense less nor it is recommended.  This does not include food which you buy from outside. Raw vegetables, soap, hand soap, body-wash, Car Insurance, etc are few examples which falls into this category. 

What we can do to reduce this value is by cutting down extra memberships like rather than having Amazon prime or Netflix, just have one. Buy from good deals or when it is on sale. If cutting down expense is a big thing for you, try living in sharing with other people, which can affect your rent amount significantly. 

Necessary Expense: 

This category includes all of kinds of payments you made for some things which you could not control but its has to be done. It's just like buying new tires, because old tires were unsafe to be use or had to go to buy medicines from outside. As, these charges won't come monthly or at-least I hope they don't come. It could be zero for some months too.

 

Extra:

So, Here comes the most interesting one. This is the category which, if modified, can save a lot of money to you. So, This may not be for everyone but for me, food that I eat outside is considered as an Extra cost. I still do a lot but I controlled it a lot by working through this method. It can include all of other charges which you think, if not made, still you will be alive. Like, eating outside, Having a coffee, etc.

Important Note:

This method is for saving your money. So, how much extent of honesty you show in this procedure, its on you as it will depend upon how much extent you want to control your expenses. Its all on your inner motivation to save your money. I was working minimum wage with only 30 hrs. a week, when I created this method. So, motivation was at peak. I hope you understand, it's all on you. Nobody cares for your money, its only you. You save it for yourself. Doesn't matter, how rich you or your father is, if saving is what you want, you do it in any way. 

Maybe there is some another way, which can work for some people or this method has some loopholes, which i don't know about yet. But, let's work it out together and make this world a better place to live. I am writing this method because that's what worked for me. I don't mind if something else works for you. But I will be more than happy if I could bring a smile on someone's face by doing this.

Peace to his World.