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+6MAKING A PLAN WITH YOUR ACCOUNT As a low income earner I want to be able to manage my account and not over spend my salary every month. To describe myself in regard to my topic, I live independently. I have rent, bills and items to buy, but at the end of the day I act like a Consumer, and I spend. Like any other individual I ask myself, what have I done with the money I’ve earned? I have so many things I want to do, that I hope to do when the time comes and I don’t want my spending ways to limit that. So I sat down and thought about how I could plan my finances. I came up with an idea which I think in my opinion can help the middle, low income earners and me. Using myself as an example, with my bank I have one account where all my salary if I get R10000 every month, goes to. I have expenses I have to pay for; monthly expenses, random expenses, future expenses. Monthly Expenses These expenses are basically payments I have to make every month like rent, water, electricity, DSTV, gym, transport/fuel, insurance, license, groceries, maid/gardener etc. Random Expenses These expenses are not paid monthly but can be paid anytime. More like expenses that arrive when you’re not expecting them to. These expenses are affected by our decisions. Maybe you randomly decide to go out, or a music festival event comes along, or you have random repairs to do, or unexpected sickness etc. Future Expenses These expenses require room for money accumulation. To be more specific, saving money to pay for things like; furniture, car, upcoming holiday, house etc. Above are examples of expenses I would spend my salary towards as an individual and at this point in my life. We are all people but we are all different, therefore we have different expenses. When I came up with this idea, I asked my sister how she manages her finances. She stays in England with her Husband, and both of them are newlyweds. They each contribute to rent and other monthly expenses. They have their own expenses that they cater each for themselves. I told her my idea and she told me that she has two accounts with different banks because she wanted to separate money for rent and other things so she doesn’t have to spend money that she wants to save. If it was a possibility she would like to have different accounts for her main expenses. THE SUGGESTION Instead of opening different accounts with different banks, I thought the partitioning will instead take place in my account. If it was made possible, I could go online and access my bank account and with available ‘command options’, I could create multiple sub-accounts with different expense sub headings of my choice and manage my finances. Sub-accounts (rent, electricity, internet, car, holiday, fees, etc). Let’s say this option is now possible, immediately after getting paid (R10000) I would open my account and would divide my money and spread it across the different sub accounts. This would mean that whenever I get paid, my money will always be accumulating in my sub-accounts. If I run out of money to spend at an outing, at least I have money saved for electricity. If there is a delay in my monthly salary payment, I have rent money saved in my sub-account. If by any chance I fall sick, I won’t hesitate to go to the doctor because I have a sub-account for my health. And by the time December approaches I can plan for a holiday because I saved for that, which in addition if I have children I can also open sub-accounts for their fees and so on and avoid January disease. Benefits of this suggestion Better managing of one’s finances With this option available to me, I would avoid reckless and impulsive spending. Sometimes people have money in their account and don’t know what to do with it and just use it for things that don’t matter. Others don’t even know how to save, they just spend on alcohol, casino etc. If it’s lying there in the account with no name attached to it, a person will just think about the present and spend and live in the moment. Makes people want to save more With this option available, I would save more and better than I did in the past. And in my opinion I think more people would open bank accounts if they didn’t have one previously and start saving. Increases people’s living standards If people had this option available their living standards would be improved. People can avoid January disease, or accidental situations that occur and require money – a person that has been saving can work their way around such situations. People’s bills and dues will be paid in time and many people can go on holiday. Children accounts My plan when I am ready for children is to open a bank account for each. If this idea is possible, there will be an example of the following sub-accounts; fees, uniforms/sports gear, stationary, spending money, boarding grocery, hair etc. When children come into the picture everything changes because you have extra people to look after. CONCLUSION This is an idea or suggestion in my opinion would help me manage my funds meaningfully and I think the rest of the population would benefit also. I got this idea from my first job and I experimented using piggy bank boxes with names attached to them of what the money was for. From this idea, my spending was managed. My impulsive spending was limited and I bought stuff I really wanted after a period of saving and more. To me I felt like I achieved something with my money and the feeling was good. Thank you for the time you took to read this!
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