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Expenses A – What Are They And What Can We Do About Them
By: Henry Tanaka
It is crucial as an individual who is striving for financial freedom to be able
to recognize the different type of expenses in our lives. It is a proven theory
that it is easier to cut your expense than trying to earn more income. In order
to maximize profits, a manager will try to minimize expenses before trying to
gain more revenue. And we can learn from that. By recognizing our expenses and
ways to handle them, we will be able to create more revenue in our lives. This
article will help you to do that.
According to Rockefeller diagram, the following ten expenses are the different
types of expenses that exist in our lives. Be aware that certain individuals
might have more expenses in their lives. In order for us to achieve financial
freedom, always bear in mind that our main goal is to minimize our expenses.
Kindly spend some time reading through the different type of expenses. (Remember
them if you have to)
1. Giving
2. Self
3. Taxes
4. Shelter
5. Household
6. Auto
7. Fun & Entertainment
8. Insurance
9. Debt
10. Business expenditures
In this article, I am going to talk about the first five expenses and in my next
article I will talk about the next five.
Expense Category #1: Giving
Most people do not consider this as an expense. Some will even completely
eliminate this and not have anything to do with it. In the bible, Christians are
encouraged to allocate ten percent of their income as a tiding. Most successful
people actually allocate ten percent of their income to benefit others. If you
were to think about it, it is making sense! We have to agree that there is some
“force” providing blessing of money for all of us. If that “force” were to
choose who should he/she provides the money to, the “force” would rather provide
the money to people that are generous. Beside, there is no point in being a rich
scourge.
Expense Category #2: Self
Bear in mind that successful people save a part of their income first and live
on what is left over.
If we practice that, it will make a huge difference in the way we handle our
money. By saving a part of our income first (try to save at least 10% every
month), we will be more careful on the way we spend our money. With a proper
budgeting system, eventually you will be able to save enough to invest your
money to make more money.
Expense Category #3: Taxes
This is an expense that we can’t avoid. There are different ways certain
individuals are able to minimize their tax expense. Consult an expert to learn
more.
Expense Category #4: Shelter
Shelter expense ranges for every individual. Some people rent a room, some rent
the whole apartment, and others got their own monthly finance payment plan. A
lot of prosperous people start out financing a house and while they are doing
that, they will be renting out the rooms that they do not use. Some will even
build extra rooms to create more revenue. Not only they are minimizing their
shelter expense, some are even able to totally eliminate this expense. Bear in
mind that in order for us to achieve financial freedom, we ought to minimize our
expenses.
Expense Category #5: Household
This ought to be your largest category expense. Household includes food,
clothing, bills, etc.
One ought to try to allocate the most budget in this category. Being the largest
category, household expense has got the most potential to be minimized. For
example, instead of subscribing to the expensive cellular phone plan, one can
choose to apply for the cheaper plan and try to limit their cellular phone
usage.
Always take note of the day that the bills arrived. Write it down in your
calendar. This way, you are able to see your budget clearly. For example, I
realized that for my electricity bill, I always receive the online bill on the
26th of every month. In my planner, I will highlight the 26th and write
“electric expense”. At the beginning of the month, always browse through your
previous month expense and try to find ways to minimize it.
Take some time to sit down and look at your expense and spend some time trying
to minimize it and with a constant practice and more knowledge, you will be
amazed at how much money you are able to save every month. I will meet you in my
next article for the next five expenses. Cheers!
Working together with you toward financial freedom,
Henry Tanaka
About the Author:
Henry Tanaka, a college undergrad who's been making a good income online,
believes that with the right guidance and teamwork anyone can attain financial
freedom through internet. Take a look at his step-by-step method at:
www.ShowerIncome.com |
