A Different Way To Look At Your Expenses

Expenses can be categorised to suit the Money Jar System. Think of all personal your expenses being split into 10 broad categories. I then fit each category into one of The 6 Money Jars.

Category 1 - Roof! - House related expenses

Money Jar: NEC ("Necessity")

Examples:

• If own home - Loan / mortgage repayments
• If renting - Rental payments
• Utilities - Water, Electricity, Gas, Phone, Broadband / Internet etc
• TV licence
• Taxes - Council / quit rent / assessment
• Repairs and maintenance
• Home insurance

Home Sweet Home!

Category 2 - Ride! - Travel related expenses

Money Jar: NEC ("Necessity")

Examples:

• If own car - Loan repayments
• If don't drive - Public transport
• Fuel - Petrol / diesel
• Road tax
• Parking
• Toll charges
• Repairs and maintenance
• Car insurance

Baby you can drive my car!

Category 3 - Tummy! - Food related expenses

Money Jar: NEC ("Necessity")

Examples:

• Meals
• Groceries

Okay, John, stop playing with your food...

Category 4 - Fashion! - Clothing related expenses

Money Jar: NEC ("Necessity")

Examples:

• Clothing / shoes / accessories

Category 5 - Health! - Health related expenses

Money Jar: NEC ("Necessity")

Examples:

• Medical
• Dental
• Optical
• Toiletries
• Personal insurance

Do you choose to take the blue pill or the white pill?

Category 6 - Learn! - Education related expenses

Money Jar: EDU ("Education")

Examples:

• Tuition
• Study loan
• Classes / lessons
• Seminars
• Books / magazines / newspapers

Category 7 - Play! - Enjoyment related expenses

Money Jar: PLAY ("Play")

Examples:

• Party!
• Food and drinks
• Toy / games

Category 8 - One-Offs! - Big ticket related expenses

Money Jar: LTSS ("Long Term Saving for Spending")

Examples:

• Holidays - Flights, Hotels, Travel, Meals etc
• Celebrations - Birthdays / Weddings etc
• Festive occasions - Christmas etc
• New furniture
• New electricals
• New laptop
• New mobile phone

Alright, Santa! You can have ALL my money!

Category 9 - Give! - Charity related expenses

Money Jar: GIVE ("Give")

Examples:

• Donations
• Supported charities

Category 10 - Invest! - Investment related expenses

Money Jar: FFA ("Financial Freedom Account")

Examples:

• Shares
• Bonds
• Unit trusts
• Mutual funds
• Investment property - Loan / mortgage repayments, management fees, repairs and maintenance etc
• Savings

So, what does this all mean?

When you track your actual expenses by the 10 broad categories, it makes it a lot easier for you to keep track of the percentages that actually go into each of the 6 Money Jars.

You can then compare your actual percentages against the recommended percentages. If they differ by too much (let's say more than 10%), then it's time to reflect and adjust your spending to align with the recommended percentages.

If you are spending too much on necessities, then Simplify!

If your FFA account is too little, then start allocating more to put into it. In other words, Save and Invest more!