Divide and Conquer

One of the exciting things we get to do as coaches is talk to our participants about their cash flow. This includes their income and expenses and when they occur in the month, so we can help them plan to save more and pay off debt to make life simpler. 

For many of us, our instinct is to wait until a bill arrives, then pay it from our current paycheck. That often creates a cash poor situation where we don’t have enough cash left over to pay for our other monthly expenses like gas, groceries, toilet paper…without pulling out a credit card. 

Our advice? Simply divide and then conquer your expenses. Open up a couple of sub-savings accounts for bigger bills and automatically transfer money into them from each paycheck.

Setting aside money for those bigger bills will give you peace of mind and a little financial simplicity.

Comments

[Stephanie]

I do this now and it's a great help. Being single and living by myself, it helps me not have to worry about the big bills that come throughout the year like car insurance. Any bill can be split into smaller pieces even items you don't know you'll need, for instance I have a savings account which I put funds in every paycheck to go towards car repairs.

[Carl W]

We do this with certain big bills. The nice thing is that when we put half the monthly bill amount into a separate account from every bi-weekly paycheck, then twice a year there's extra money sitting around!