Explaining personal finance can be pretty dull. That’s a problem, if you need to learn about personal finance.
On a plane from St. Louis to Seattle, I decided to try and fix the problem. What if I could wrap some finance concepts inside of a quirky (funny?) short story? My goal here is to present some information, and then add another step in the story. So, when you get to the end, you’ve been reminded of an personal finance concept- but you’ve received the information in a light-hearted way.
Anyway, that’s the goal here. The stories are written in chapter order, so that there is a logical flow for the reader. Here’s a link to the prior chapter. Enjoy!
Wow, these buckets are heavy.
Greg decided to switch hands and carry the bucket in his left. He and his friend Tony were on a Walk For Water charity event, a fundraiser for Water Missions, which raises funds and awareness for the global water crisis. He walked past a sign:
“About 2,300 people around the world die each day due to inadequate drinking water and sanitation”
Wow- that’s a big number.
‘So anyway, how’s it going?”, Tony smiled as he pulled up along side Greg. The idea of the walk was to carry buckets of water for three miles- the daily trip required by many people who had to find drinking water each day.
“Pretty good- this volunteer shirt is supposed to be 100% cotton, but I feel like I’m wearing nylon. It’s not breathing at all.”, Greg smirked. “Oh, the budget? It’s going…well, OK.’
The sidewalk got steeper as they headed away from the park. “Wow- I should have dumped out some of the water when they filled up my bucket by the lake. Now if I do it, everyone will notice- I’ll look like a weakling!” Tony laughed. “So, tell me about those steps you took to create a budget”.
Greg jammed his hand into his pocket. “Since we were doing the walk together, I printed a copy of my budget and brought it with me.” Greg kept talking as Tony glanced at the paper.
“My gross monthly income is at the top- $6,000. Then, I have the monthly cost of all of my fixed expenses: my mortgage, car loans, insurance- and that totals $4,500.” Greg glanced to his left as a boy ran by with a small bucket of water. Small boys were like sharks- they have to eat and keep moving, or they die…where does he get the energy?
He turned back to Tony. “That kid’s pretty fast! Anyway, if you look below, I have my variable expenses of $1,200, and monthly savings of $300. Like you said, $300 as 5% of my monthly gross income of $6,000.”
Tony handed the budget to Greg, and they both switched hands to carry their buckets. They passed another sign:
“35% of the global population live without proper sanitation- approximately 2.4 billion people”
Tony shook is head. “These numbers are staggering… so, you’re three weeks into your first month using the budget, right?”
“Yea, I linked in my bank account and the one credit card that we use to the Mint mobile app.” Greg wiped his brow as the sun came out. “It’s cool, because the app tells you how much left you have to spend in each category. I guess the only thing I haven’t done is open a separate savings account. I figure we can just keep the savings amount in checking for now.”
Tony thought for a minute. “I found that, if I left the money in my checking account, I’d end up spending it. I have Bank of America for both checking and savings. On the first day of each month, my savings amount is automatically moved into a separate savings account”.
They both noticed a water station for walkers in the next block. Tony turned back to Greg. “I’d really recommend using that savings account. It’s kind of fun- you can see how much money you’re accumulating.”
Just then, an older woman passed them carrying two buckets. Overachiever.
As always, this information is for educational purposes only. Consult a CPA or a financial advisor for more information.
Action Steps To Consider
Consider using a budgeting app to monitor your spending, and set up a separate bank account to discipline yourself to save.
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(website and blog) http://www.accountingaccidentally.com/
(you tube channel) kenboydstl
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