One of the problem people have is that as soon as they've got some money piled up in their bank account,they think they can go spend it.
Even if that money is sitting there for a good reason just seeing the big pile of money make people think they can go shopping. If the account is joint,then two people can be trying to spend the same money on different things.
It helps to think of your money in piles. If you know you have a plan for each pile of money, you're more likely to keep the money available to spend on things you really want.
Think of your money as being in four piles
•Long term savings
Cash flow:when you make a budget and decide how much you'll spend, you're figuring out your"cash flow". when you get plaid the cash flows in,when you pay for something the cash flows out. It's a good idea to have a single transaction account through which all your bills are paid every month. A single account makes it easy to track your spending and to check that you've paid everything on time.
Emergency fund:As you know, your emergency fund is the money you set aside just in case something goes wrong. This money should be kept liquid in other words,it Should be easy to get to quickly so a high interest account often works best
Long-term savings: You also now know that you need to set aside some money in long-term savings. This is the money for your retirement, which you don't touch for a long time.This money is sacred. Don't dip into it for any reason.
Planned spending:The pool of money most people are leats familiar with is "planned spending".While people say they're saving for vacation, it's more accurate to refer to its s money they plan to spend so it is planned spending.planned spending is what you do so you don't have credit.
You can manage your planned spending money in a couple of ways:
•set up a separate savings for each item of planned spending
•Set up one savings account and keep track of what's going into the account on paper.
Remember to think of your money in these four piles.Doing so you should find it easier to keep the amount you allocate for specific purposes organized.