You have probably heard the saying “Pay Yourself First”. A few years ago, I saw a graphical representation of that saying that used water and buckets to represent the flow of money. In that analogy, income/money comes pouring down from the top and fills or leaks out of various buckets as it cascades down to the bottom. It is up to you to decide what buckets get filled up first and how much water is wasted (frivolous spending). Below is a rough representation of how money flows through our personal finances. You can see how we have put “paying ourselves first” as a top priority as those are the first buckets to be filled up.
If any water makes it to the bottom of the pipeline it can be used for FUN!!
Are you making the gold star buckets as big as possible? Have you reduced your red leaky buckets to the smallest they can be? Is your FUN!! at the end of the line, beginning, or somewhere in-between? Have you set up any reservoirs (emergency funds) for future droughts?