To make it short, all your income should go into your Primary Account which is your Bank Account Number 1. We then allocate our money into 5 categories of virtual jars which depict each area of your spending. I listed them below for reference.
- Living and lifestyle jar (Bank Account 2): Transfer a weekly allowance, known as your “7-Day Float,” to cover your day-to-day living expenses. This helps you track your money and capture more surplus by sticking to a budget.
- Credit card jar (Bank Account 3, can be ignored if you don’t have a credit card): Use this account to pay regular bills like electricity, gas, and water.
- Direct payments jar: This virtual jar is used to pay bills directly via BPAY or if they can’t be paid by credit card. It’s linked to the Primary Account.
- Loans jar: Allocate funds in this jar to cover monthly loan payments.
- Provisioning jar: Set aside money in this jar for planned future expenses or unexpected spending, such as a birthday party, braces, or travel.
You will understand a lot more of the above by reading the Make Money Simple Again Book that you can download for free here: https://www.makemoneysimpleagain.com.au/mmsa-optin-1631058829788.
We also have a MoneySMARTS Tutorial on Youtube: https://www.youtube.com/watch?v=lDSuK-ndRQU&list=PLGVxoe183ktKl5OairLbP_vd39rIaeA8R&index=6&t=16s.
You can find more helpful videos in this playlist: https://www.youtube.com/playlist?list=PLGVxoe183ktKl5OairLbP_vd39rIaeA8R