Financial Freedom Friday

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I have always strongly believed that it is not how much you earn it is how you spend it that counts.

No matter how much or little we earn we can often find ourselves buying things we don’t really need or want causing us to sacrifice ever buying the things we truly want and dream about.

Whether it’s a house deposit, travel, a boat, a car, paying off a debt or credit card,  expensive outfit these things can often feel always out of reach.

Here’s a strategy for making those things a reality.

Open a savings account, label it travel account/house deposit account or whatever it is that you would like that seems always out of reach.

Whenever you buy something ask yourself, “do I really want/need this or would I rather put the money in my savings account’

If you decide you do not want to make the purchase, put the money that you would have spent into your savings account. Keep a notebook for all of the decisions you make through the day as they can soon add up.

There are some rules for this strategy –

Never use the money in your dream savings account for bills or anything other than what you intended it for. (if bills are a huge problem, then it might be an idea to focus on your budget before buying things anyway, it can be uncomfortable, but at least the exercise may help you understand where your money is going.)

This strategy is not supposed to leave you feeling deprived – most of the time you will say ‘yes I really do want to buy this thing’ and that is ok. One object of this strategy is to become more conscious of your purchases and where your money goes. There will be many times though that you will think ‘No I would rather buy my dream item”

Do you want the chocolate bar or the holiday?

Do you want to buy the book or read one of the unread books on your bookshelf?

Does your child need that toy or would they be just as happy playing a game with you that you already have?

Do you have anything to sell?

Do you need to buy lunch every day at work or could you take your own on some days?

Do you need to buy peanut butter, or can you buy some peanuts and blend them up at a fraction of the cost? (yes, there are many ways to save money to put towards your dream purchase)

This exercise should be fun and creative – Make sure you do put the money into your savings, you were going to spend it anyway so it won’t be missed.

 

Let me know how it goes for you!

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