A Better Way to Manage Your Everyday Money - Book - Page 42
controlling our spending. The theory is that if you know where your money went, you can make
better future spending choices. That works for some, but most of us find it difficult to drive
forward while looking out the rear window.
While there are unlimited ways in which we can spend our money, the choices that we have for
using our income, both immediately and in the future, fall within one of five categories:
● Spending – using cash that you currently have
● Bills – making payments to a creditor or servicer
● Credit cards – going into debt that you intend to repay with money you expect to receive
in the near future
● Sinking funds – accumulating money over a specified period of time to pay for something
with cash at a future date
● Savings – setting aside current income to use in the future
Adding these categories to our cashflow gives us the entire picture of how our everyday money
flows.
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