How to Build a Solid Personal Finance Foundation
3 min readMar 14, 2022
- Do an honest audit of:
- How much you currently have
- How much you currently earn
- How many do you currently spend
- 5 Expense types:
- Variable expenses
- Regular expenses that are somewhat fluctuating, and do not have to pay on a fixed timeline
- E.G: gas, groceries, and entertainment
- Fixed expenses
- Do you have to be paid on a regular time-line, like every month
- E.G: rent, cell phone bill, car loan
- Donations
- Studies show that generosity actually leads to an increase in income
- Savings
- Paying yourself
- You can automate this by simply opening up a savings account having an automatic transfer
- Fun money
- Money to enjoy life on, because what’s the point of having financial goals and money if you can’t enjoy it?
Which of these is taking up your priority is what will determine your finances.
The key is to prioritize savings before anything else, including your fixed and variable expenses.
