A Better Way to Manage Your Everyday Money - Book - Page 79
Spending expense
Buying things with cash, regardless of the payment method, is referred to as spending.
Remember the bucket discussed in Chapter 1? The one with the hole in the bottom that gushes
money? That hole is your uncontrolled spending. It’s where most of your money goes when
you’re not paying attention. Putting a faucet on the spending hole in the bottom of your money
bucket is a key step toward gaining control over your everyday money. Installing that faucet
gives you the means to stop living paycheck to paycheck by controlling your spending. That
faucet is called an allowance.
With a consistent amount of money allocated to spending as an allowance, the amount of income
available for other expenses is also consistent, thereby making it possible to plan all of your
expenses.
A weekly allowance is independent of when paydays happen. Instead of waiting for payday to
put money in your pocket, with a weekly allowance you are never more than six days from your
next allowance day. The cash roller coaster from paycheck to paycheck is eliminated.
You do not plan how you will spend your allowance. Nor do you keep track of how you spend
the money. The sole objective with your allowance is that the amount is just enough to get you
through the week: you have little or no pocket money left over on the next allowance day.
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