Financial Numeracy
Isn’t it amazing that most of us can recall a time of not earning much, however saving a little, then earning much and just about saving a little if at all. Does the term More Month Than Money resonate with you? If so, you’re not on your own. More and more people are finding themselves in this trap with fewer and fewer being able to establish a plan of action to reverse the trend.
With frozen salaries and the rising cost of living, it’s not surprising to find that those who do not exercise a degree of financial numeracy find themselves utilising credit cards and overdrafts to see out the month.
How many of you when asked the question how do you lose weight? Will respond by saying something like, “Eat less and exercise more.” And yet when it comes to managing money you are at a lost. So how do you reverse the trend of more month than money?
Now you might be thinking easier said than done, however “If you always do what you’ve always done, then you’ll always get what you’ve always got. So, if you want what you never had, you have to do what you’ve never done.” A good money plan is dynamic and changes as your life does. Review and adjust your budget every month. It’s not about how much money you make, but how much money you keep.
Now to be fair one cap does not fit all. Some of you through no fault of your own have found yourselves in the red due to failing health, redundancy, divorce, sudden change in circumstances the list goes on, however there’s a saying “If you fail to plan, you plan to fail.” What’s your plan?
Gaining financial numeracy through the money jar system, something you can start as from today. To use this system, you simply set up 6 jars. Each time you receive your income divide your money up in the jars as follows.
1. Necessities – 55% of your income
towards rent, bills and food.
2. Education – 10% coaching, books and
courses.
3. Long term savings – 10% big
purchases, emergency fund and holidays.
4. Financial freedom – 10% investments,
property, stocks and shares.
5. Entertainment – 10% spoiling yourself
and family, leisure expenses.
6. Giving – 5% charitable.
Here’s To Your Success
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