Controlling Your Money and The Ten Categories of Spending Money

Disc One, Tracks Four and Five of Multiple Streams of Income by Robert Allen

These tracks from Robert Allen’s Multiple Streams of Income course are entitled Controlling Your Money and The Ten Categories of Spending Money.

Robert Allen shares with us a simple, easy and powerful way to think about our money. He reflects on the previous track where we learned about the Rockefeller kids and how they were instructed to account for how they spent their money to the penny.

Mr. Allen then introduces us to a simple concept to see our financial situation and he calls it the Bathtub Theory of Economics. He explains that money FLOWS into your life through a money faucet and pours into your money bathtub and flows out through a money drain. The goal is to fill up your bathtub to an overflowing level. Is the best way to fill up the bathtub by turning on more faucets or to plug the leaks (drains). He tells us that it’s both.

Most people have just one major faucet (their job). So he tells us that we have to plug our leaks and turn on more faucets. He then lists ten leaks in order of priority. The first three are your partners:

1) God (Charity or Tithing) 10% 2) Self (Savings) 10% 3) Uncle Sam (Taxes) 4) Your Shelter (House or Rent Payments) 5) Household Expenses (Food, Clothing, And Normal Living Expenses) 6) Your Automobile/Transportation 7) Fun – Entertainment 8) Insurance – Health, Life, Disability, Home Owners, Etc. 9) Miscellaneous – Including Payments Toward Debt 10) Business Expenditures

He then goes on to ask us to categorize all of the money we spend in these ten categories. He says even when you use a computer program to track your expenses; you should still categorize your expenses this way.

He then gets ready to examine a money transactions or event. Mr. Allen points out that we really only have a few money transactions each day. He tells us that the rich person spends an average of just one minute more per money event than the poor person. On track six he goes on to explain this.

This way of thinking can sure simplify how we manage and spend money. The visualization that these are all leaks in a bathtub certainly makes sense and we can feel great whenever we shop around or find a way to minimize these expenses. Don’t forget the value of a dollar, and learn to control your money with the ten categories of spending money. You’ll be on your way soon to earning and benefiting from your multiple streams of income.

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