How many times have you reached the end of the month that you realized you have no savings?
And worst of all…….
…..you are in debt!
And you think to yourself, “next month I will save more of my money”.
Next month came…..
…..you are out of cash; and what’s worse than that…..???
You are in even more debt than you were last month. What do you do? How do you handle this little financial snowball situation quick before it becomes a financial avalanche of debt?
These are ways you can start budgeting your income. (This is extremely for beginners)!
…But if you already are good at budgeting and you need a refreshing, then you can read on.
THE 4 PYRAMIDS OF BUDGETING
10 Percent Dust Money
It is exactly as you’ve read it. Dust money.
Save 10 percent of everything you earn and keep it in a savings account where it will accumulate not only dust but also interest every year.
Every little cash you earn, place ten percent into your dust money account and never touch it.
The only time you are supposed to touch it is when you want to invest it. This money is not for playing around. These are your soldiers that will go out there and earn more money for you.
10 Percent Charity
The universe rewards the giver. Give and it shall be given unto you.
Whether you are religious or not, you probably already know that giving is a very good thing and that God, Allah, or the Universe will repay you well in one way or the other.
Budget the other ten percent of your income for charity or the less privileged.
Related: Books to read on finance
10 Percent Playaround Cash
This particular ten percent is for you to use for yourself.
Do as you wish with it.
You should enjoy your money, shouldn’t you.
“But 10 percent for myself is too small“. -you may say!
Yes, 10 percent for yourself is too small. But this is not the amount you spend on yourself. This amount is for all those “wants“, those things you know you don’t need and will probably feel guilty after purchasing it.
This particular 10% if for you to do as you wish and not feel guilty about it. Let it serve as your guilty cushion.
Finally, your last pyramid;
70% Upkeep Money
This money should be the remaining cash you have at hand after saving your first 10%, giving the other 10% to charity and buying that ridiculous outfit you did not need, or treating yourself to a double-cheeseburger even after deciding you wanted to start eating healthy with the other 10%.
Now 70% remaining;
This is for the rest of the stuff you “need” money for. Like your bills, food, clothes you need, mortgage, transport, gas, rent etc.
By the way;
It is not compulsory you give your 10% “charity fund” to charity. (Ignore the name of the 2nd pyramid). You can give it to anybody who needs it; as long as you give it out.
The Chronicle of the Pyramid
The pyramids are one of the sturdiest structures on earth and if you model your finances like the pyramid structure above, you will have no problem dealing with your finances.
Has this article been helpful to you? if so, let us know in the comment section below.
BTW: You should check out Budgeting for Beginners on this website. I think it will help you a lot.