Have you ever got halfway through your pay week or fortnight, to look in your bank accounts and think “hey, where did my money go?” It’s a common feeling – and makes a lot of us feel helpless and powerless in the face of rising bills and increasing costs of living.
Saving first (before you spend) can be a game changer for you and your household finances. Not only are you actually saving money, with less to spend you end up spending less. (Wait, what?) Yes, you heard me – the less money you have to spend, the less money you actually spend in your everyday expenses!
There’s ways to reach this holy grail of budgeting, and one of the things we cover in Where Did My Money Go is exploring the greatest tool you have to make a difference: updating and changing our habits.
For so many people, we know that there’s plenty of money available and we CAN save money, if we want to. But, for some reason, there’s never any left over to save. So the first thing we do in Where Did My Money Go is look at where you are spending your money and what you are spending it on.
Saving first (before you spend) is a game changer for you and your household finances. Not only does it slow you down, but the process allows time for deeper reflection, bargain hunting, or even changing the original desire!
This is a very common experience for most people I work with. Your money isn’t just cash, it’s also your time, your health, and your stress levels. You deserve to be taken care of just as much as your cash does.
Here’s what we do together:
Figure out what you actually want to save money for.
It has to be intentional. It has to be meaningful.
We have to be organised and regimented, so we have to want that goal really badly. We need to follow a system and a structure, and you have to feel it in your heart.
Once you know what you want to save for – whether that’s for a new house, a holiday, a new pair of boots – it doesn’t matter, but the key is to have a separate bank account for the money to go into. Even $5 per week, set aside, means that you are working towards hitting that target. A 10 year old who came to my workshop once said he was saving for a snake. Not my cup of tea – but he was very motivated (and yes, still has his snake!).
The age old “set up a savings account and you will magically save money” just doesn’t work. You need to do the follow up (XX per pay) as well.
Once the money is set aside – it’s locked down.
Knowing that you are saving for a holiday means that you have a choice. Do you really want to go on a holiday, or would you rather go out with your mates to the pub for an awesome night out?
You can have both, it just means you have to be realistic about timeframes, in that going to the pub is spending money now that also could have been allocated to the holiday. Name your bank account so it’s crystal clear what you’re saving for. I once had a client who had a bank account called “America F*** Yeah”. I’ve also seen House, Horse, Car and more. Every dollar that is going into that account is meant for a better holiday experience, and it is OK to forgo a couple of things each week to have a better holiday. However, remember to make these choices consciously, or your unconscious spending will keep letting your money dribble out of your account.
There’s a “no touchies” rule on this account – unless it’s for holiday deposits or to get you closer to your goal.
But what about spending less?
You have now put some money aside – and this is money that you will spend for your holiday (or shiny new boots). What’s left in your account? The money to spend on other things, like food, fuel and stuff.
Soon you will find yourself thinking things like: I don’t want to go out for dinner, I would rather go to dinner in America.
This constant reminder of having money for your new goal is super exciting, and can help you to be a bit frugal for a few months. Perhaps even try new things that you haven’t tried before, such as having a picnic in front of Netflix for $25 instead of the Gold Class cinema experience for $135. Saving an extra $110 and putting it straight into your savings account means 2 things: you have reduced your spending AND you have increased your savings. This becomes a lot of fun – especially if you have an accountability buddy (such as your partner or friend).
You start to find new ways to make money, to reduce spending, and to save more.
If you want some accountability, then join us in Where Did My Money Go – Boost Me Up. These fortnightly group sessions are a great way to keep in touch with what you really want, help you track your position, and find new and exciting ways to swap out the spending for saving!
I can’t wait to meet you and see you there!
