Make Money Simple Again by Kingsley Ben;Holdaway Bryce; & Ben Kingsley

Author:Kingsley, Ben;Holdaway, Bryce; & Ben Kingsley
Language: eng
Format: epub
Tags: Personal Finance
ISBN: 5573988
Publisher: Major Street Publishing
Published: 2018-09-19T00:00:00+00:00

Step 6 – Tweaks

Good news – we’re out the other side of all the numbers and on the home stretch in terms of implementation and operating the Money SMARTS system.

Now that you have been walked through an example of the first month’s check-up, you probably want to know what happens if you make changes to either income or spending – as things are definitely going to change every now and then.

When it comes to tweaking, it’s important to remind yourself about the ‘M’ and ‘A’ in SMARTS – Mindset and Application. As your guides in this journey of money discovery, we really don’t want you to be changing or adjusting your numbers all the time, because what is likely to happen is your trapped surplus target will diminish each time. It’s been our experience that people often forget some of their expenses in the initial planning stage, such as when they have been tempted in life by short-term spending highs that are quickly forgotten. The more spending you miss, then obviously the less surplus you will have. So, we challenge you again to see if you can find any savings elsewhere in your bills or general spending to compensate for any new spending you put into your yearly plan.

Ultimately it is your money, but the more you save, the more your money makes for you. Once you’ve spent it, unless it’s on an appreciating asset or investment, then it’s gone for good.

Intra year tweaks to income

If there’s more money coming into the household, simply input the additional amount into your ‘money in’ balance, calculate the annual increase and then divide it by 12 to get the average monthly amount. This will increase your overall targeted monthly and yearly surplus. Nice one!

If some of your income is stopping, then you simply remove the income in question and recalculate the annual and monthly income, and this will reduce your targeted yearly surplus.

Importantly, if this cut in income sends your surplus into a negative position, it’s a problem. You need to immediately look at your discretionary spending and cut back to ensure you can return to surplus. If your income doesn’t return to surplus, this means that each month you will be eating into any surplus (savings) you have in your Primary account. If you have over 12 months’ reserve, your situation is not too dire. However, we would still recommend that if you are unsure of your plans to turn this situation around, it’s time to get some professional help with your finances.

Intra year tweaks to spending

More often than not, you are going to have to tweak the spending side of the ledger rather than the income side. You will need to make tweaks when:

The interest rates on your loans move from time to time, and this will impact your numbers.

Your utilities’ bills go up – electricity or gas bills. (Although we challenge you to shop around and find a better deal from alternative utilities’ providers.)

Your general spending increases – once

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