No one likes to think about bills. But if you’re like most people, you think about them constantly. You may be stuck wondering each month how much you can spend on groceries and still have enough left for utilities, rent and other recurring expenses.
Your bills aren’t going anywhere (sorry!), but that doesn’t mean you have to stress about them.
In fact, if you structure your finances the right way, you’ll hardly have to think about them at all!
The Perfect Account Structure
The foundation of Financial Freedom is building the perfect account structure or system that directs the flow of your income into various accounts that serve different purposes. Whether that’s paying your rent or mortgage, going out to dinner or putting away for your future freedom.
For a closer look at how this works, download the Perfect Account Structure worksheet accompanying Module Two of our Financially Fit Bootcamp Program.
Once you’re all set up, your new structured account system will consist of:
- A central Income account that includes income from joint and/or single accounts;
- A few key secondary accounts starting with a Bills account and an Everyday account to address daily purchases; and
- A Pay Yourself First (PYF) account that will be used to build your freedom fund, eliminate debt or increase your safety net fund.
In Module Two, Video Four of the Financially Fit Bootcamp, we go over the nuts and bolts of this new account structure and explain how parts may vary slightly depending on your particular circumstances (e.g., you’re married with two income earners, single, a parent of pets, etc.).
The Three Main Types of Accounts
The first thing you need to understand before setting up your new structure is the differences between the three main types of accounts. Below are the basic guidelines for each: