Jellyman Investing - Personal Finance for Australians
Business:Investing
https://www.patreon.com/Jellyman_Investing
Welcome to another episode here at Jellyman Investing where we'll be talking about building your foundation. That means, learning how to structure and automate your accounts so that you don't over spend, you have a better understanding of where the money is flowing and most importantly, slowly and steadily build your savings to the coveted 6-12 month target.
Before I get on with this episode, a reminder that I have a Patreon page where you can read articles, download spreadsheets, get internet resources, watch tutorial videos and even chat with me. It's free to join so sign up today. The link is:
Patreon.com/Jellyman_Investing
Also, a disclaimer, that I am not a financial advisor, please consult with a professional before making any financial decisions. On with the episode.
---------------------------------
In the past, many people, including myself, managed finances through a single bank account, making it hard to track spending, bills, and savings. This approach often leads to overspending and unclear savings growth.
The game-changer for me was learning about account structuring and automation from "Barefoot Investor." Automating finances reduces reliance on willpower and provides clear visibility on each account's growth.
Most banks offer multiple accounts through their apps. A basic structure includes four accounts, but customization is encouraged for individual needs.
1. Everyday Spending: For daily expenses like lunch and transport.
2. Enjoyment: Allocating funds for leisure without overspending.
3. Short to Mid-term Goals: Saving for things like weekend trips or special purchases.
4. Emergencies: The most crucial account for unexpected, large expenses. It's important to prioritize this fund to avoid setbacks.
For instance, if unexpected expenses average around $1,000, aim to save $2,000-$3,000 in the emergency fund. Once this target is met, allocate more to other accounts.
Many people spend their paycheck without saving effectively. Scheduled payments in banking apps can help allocate specific amounts to each account based on income and expense understanding.
This system resembles the Japanese practice of using labeled envelopes for budgeting. Expanding beyond four accounts for specific expenses like bills, insurance, or pets ensures funds are always available for each category. Surplus funds in these accounts act like mini savings accounts, gradually growing.
This practice is crucial regardless of income level, from $2,000 to $50,000 a month. Efficiently moving money to where it's needed prepares you for more complex financial ventures like investing and real estate.
S01_E20 - Basic Principals of Investing in Individual Companies
S01_E19 - Variable vs Fixed Mortgage Structures
S01_E18 - Understanding the Role of a Broker in First-Time Property Purchases
S01_E17 - Building 6-12 Months of Savings and Buying your First Home
S01_E16 - Understanding the Tax System for Financial Independence
S01_E15 - The Biggest Money Fears and What to do about them
S01_E14 - How Much Do I Need to Retire - Part 2
S01_E13 - How Much Do I Need To Retire - Part 1
S01_E12 - Retirement Planning - Superannuation as a Back Up
S01_E11 - A 9-5 Job will never make you rich
S01_E10 - Building a Wealth Strategy - Debt, Housing, Investing, Economy
S01_E09 - Welcome to my Patreon
S01_E08 - Good Debt and Bad Debt
S01_E07 - The Gold at the End of the Rainbow
S01_E06 - Understanding Compound Interest
S01_E05 - Tips on How to Save
S01_E03 - Debt, Credit Cards and Personal Loans
S01_E02 - Developing your Money Mindset and Forgiving your Past Self
S01_E01 - Welcome to Jellyman Investing
Create your
podcast in
minutes
It is Free
The Commercial Edge: Unleash the Power of People
The emPOWERed Half Hour
Aligned Money Show
Dubai Property Podcast
IBKR Podcasts
The Ramsey Show
The Clark Howard Podcast