You Think You Don't Have Money For Savings
Where are you?
Choosing To Save
For those of us who did not wake up to paid employees making our bed, giving us a bath and cooking us breakfast as we get our nails cut and trimmed.
Those of us who understand money is easier spent than earned. Those of us who understand you'd have to learn how to save, to learn how to survive. For those of us, I have compiled proven steps on how to save a penny, continuously.
How Money Works
The concept of money is simple. It comes in, it goes out. I know that, you know that, everybody knows that. However, the way you understand this simple concept determines your subconscious financial discipline.
Concept of Saving
Money Comes In, Money Goes Out.
First school of thought:
For the longest, I understood this concept the way my parents taught it: "Money is meant for spending". Every time I spoke with them about financial struggles, I heard that phrase. I heard it so much it framed my subconscious mind and I have since learned the advantages and equal disadvantages of this concept.
You see, living with the knowledge that money is meant for spending allows you to loosely spend money. If you loosely spend money, you would not have money.
The advantages of "Money is meant for spending"
You have no guilty conscience when you swipe that card and hand over that cash.
You regard money as a guest, no bond or ties to it.
You understand for you to get what you want, you have to spend what you have or don't have.
You focus on what money can buy.
You have to spend money
You have no guilty conscience when you spend money
Your subconscious focus shifts to spending money for everything you want
You treat money as a guest, no connection, no bond
You work more hours
You have little to no savings to show.
When it comes to saving and being financially independent, everything is wrong with this concept.
Guilty conscience is not the right mindset however you should feel less excited when you spend money because you most likely would not get that money back.
Thinking money is meant for spending changes your focus from finding free things, cheap deals and how long you can keep a particular amount in the bank without spending instead you think "hey, if I have to spend it, I might as well spend it now".
Your money should not be a guest, it should be a super power you want locked up for as long as possible.
My rich friends say "money is a servant", when you're rich you can call money whatever you want but while on your journey know it's not a servant but instead Money is a dumb friend.
The term "friend" means you have to cultivate a relationship with your money or you'd end up paying people to create a relationship with your money on your behalf.
Just like every relationship, there has to be a smarter friend, in this case, You.
Money Comes In, Money Goes Out.
Second School of Thought:
Money Is Meant For Saving.
"The best way to handle a problem is to not have the problem."
The best way to come out of debt is to not have the debt.
When you understand, you owe it to yourself, your kids and future family members to save money, your excuses reduce.
Thought Inspiring Questions
Let's both think about this for a second:
How great of a legacy are you leaving behind if your kids and grand kids have to struggle in life like you did?
My kids and grand kids should not, would not have to struggle in life like I did and if that means I have to know where my money goes?, so be it.
If you could have a job waiting for your children and grandchildren, would you consciously choose to make them starve while you pay off interest making the rich, richer?
I would rather have opportunities waiting on my kids and grand kids than take up more than one loan (mortgage) only to pay interests to increase the wealth of a wealthy person.
What are the disadvantages of "money is meant for saving"?
You spend less
You think before you spend
You only buy what you need
You have less baggage
You have an opportunity to make your money make more money.
There's two parts to Money. Baby Money, Daddy Money.
Baby money is the one you spend because you have to spend and this is where a lot of people get stuck.
Baby money should only cover the basic necessity. You have to have a place to live, You have to eat, You have to have a piece of clothing. You have to have a form of transportation.
Baby money should not include additional items like continuous shopping, miscellaneous bills, trips, repairs, maintenance, getting a bigger TV. Baby money is strictly for your "I would literally die without" expenditure. Make these expenses on a cash back credit card and transfer the funds immediately to the credit card account.
I'm going somewhere with this and soon you'd understand.
Daddy money is the money you do not spend when you receive. Daddy money is gold because it would take care of you, seriously. Money you do not spend would take you where you've never been, introduce you to people you've never met. I know it sounds like an irony because for you to take a trip you have to spend money and if you're having this thought like I am, congratulations, it means you are starting to have a shift in mindset.
If you've taken trips like my family has, you'd soon realize families that vacation with money to spend quite stand out from families walking around with a calculator.
To begin accumulating Daddy Money, start slow.
For the first two months: Start with a 401K percentage your company would match.
After two months: Save 10% of your earnings and cut the debit card to that account, destroy the check book, do not memorize or have the account number.
How To Save With No Debt
For every 7 days starting today, write down your expenses alongside your income. Find out how much you went over. Find out where you spent money you didn't have to, find out where most of your money goes.
It took me over 2years for a light bulb to go off on just how much I spend on food, drinks, "having a good time" and my desire for you is to learn from my experience.
My desire is that my knowledge from real life practices, countless hours of reading books and financial counseling would help you be a better ''you". I have gone through the painful huddle, you don't have to go through it too.
Write down the "have to spend money" activities — this is where immediate maintenance, future trips, shopping comes in.
Find out how much debt you have. Find out how much you could really save. Find out how else you could legally acquire the things you want to buy without a new debt. Find out if you still want the same things after a week or two.
You see, I was what I call "a happy swiper". I bought drinks for friends, went to extravagant dinners, bought whatever I wanted and paid little attention to how much I've already spent that I haven't paid back.
You want to be rich? Do not spend money you haven't earned.
Questions about Money and Savings
I included my answers to questions I receive from people I counsel on money management:
- I want to buy a car, how much car can I afford?
The amount of car you can afford is one where the monthly payment from financing is equal or less than the amount you save every month without affecting the amount you save every month. The type of car you buy is a car you can and would drive for the next 5 years. The duration of the loan should be below 5 years.
- My monthly expenses is more than my income, how am I supposed to save?
You consider saving an option and as long as you consider saving an option, you'd have a reason not to save. Paying your rent/mortgage is not really an option. Buying groceries is not really an option. Saving is just the same way, it's not really an option.
Get a higher paying job. Get certification. Find other streams of income. Find a partner. Does your partner work? Would you be better off with one person working from home? In a month, do you go at least 10 days without spending money?, can you increase that to 15 days without spending money? Are you paying off debts?
Your expenses being more than your income means you're living above your means, that's a poverty cycle. On your ladder to be rich, your ego cannot be a driving force. So put your ego aside, what would happen if you sold half the things you owned? What would happen is you asked relatives for hand out? What would happen if you send your partner and kids to live with family? What would happen if you stopped spending money? You would not die.
If this is you, you have to understand breaking that cycle requires a drastic life change and until you have the strength to take that change, you'd keep rolling in that cycle.
- What about big expenses I cannot ignore?
You'd spend money eventually and to be clear, this is very different from money is meant for spending. Maintenance on the house, shopping, trips are expenditures you'd encounter eventually and sometimes more than once.
These expenditures are not to be taken care of by present savings, they are to be taken care of by previous savings so in the case where you do not have previous savings, you split your savings. One part to upcoming expenditure, one part to actual savings. Savings is not an option, it's do or debt (die).
When it comes to repairing the roof on your house, that cannot wait, in this case, repair the roof. Find interest free loans, if possible put down over half the charge for repairs. Think of free ways to accomplish the same result. Search for cheap labor or consider doing the repairs yourself.
One thing you've learned from reading this article is, Not taking steps to save for you and yourself is you taking steps to save for someone else (a corporation).
Everything is possible.
What you do today to better your life, Your future self would thank you.
Now you know better, do better.
Excuses are for the unsuccessful, it's a coupon you can only use if you're part of the group and they're always recruiting.
If you ask your brain, "how can I save?", your brain would give you ways to save. If you tell your brain "I cannot save", your brain would give you reasons why you cannot save.
If you repeat these steps, you'll achieve the same results I did.