How to get your money under control NOW

Money is often a difficult and scary thing to think it can just be solved like that, well it can’t be. It takes time, a little effort, a small amount of knowledge and a reasonable amount of SELF-DISCIPLINE. However, the work that you put in goes a VERY long way when it comes to saving money. In this post, I will outline HOW I think you can start saving money and the issues and EXCUSES people give me and themselves for why they don’t save money or look after what they spend, I will also go through techniques to prevent irrational spending.

It is also very appropriate to point out that even though I act all high and mighty giving this knowledge out I am nowhere near perfect with my savings, I make mistakes and a spend irrationally, for example; Recently I bought TWO orders from gymshark totally somewhere near $350 NZD, this is a large amount for me and although I do not regret the orders I do think I should have contemplated my self discipline for longer.

EXCUSES and ISSUES

Excuseitis – A disease caught by people who carry self limiting beliefs around with them every day, they believe they cannot achieve a certain goal because they have not seen it done by people around them or have tried and failed previously.

People are either scared, do not care enough or they are just too DAMN lazy to begin the long and prosperous process of saving their money. I want to smash all these excuses by demonstrating that YOU CAN START TODAY. Saving is very VERY easy, everyone can abstain from that one latte or thatFOOD that is overpriced and unfulfilling or even that friend that you spend SPEND SPEND with I am sure they do not love spending their money the day after either. Discipline when possible and change your habits with expensive people to save that extra few dollars per week to stash away.

Develop a STRICT yet beginner plan.

Personally, for myself, I was earning $90 a week as a secondary student (15 years old) and I saved $40 per week IN CASH, I would withdraw it from the ATM machine and store it in a can hidden under my bed, I racked up $400 before realising this was inefficient so I then got a new bank account and continued just transferring the money into there instead, the perk of the bank account was I was given extra interest in exchange for paying a pee for taking money out of the account.

“A part of all I earn is mine to keep.’ Say it in the morning when you first arise. Say it at noon. Say it at night. Say it each hour of every day. Say it to yourself until the words stand out like letters of fire across the sky.”
George S. Clason, The Richest Man in Babylon

Create a weekly or bi-weekly plan that capitalises on the fact that if you pay yourself first you do not notice the “missing” money and you do not have to make a decision of when to put the money in, either automatically makes it transfer or transfer the money yourself.

  • It is ok to miss a week but attempt to learn from the mistakes and make up for the lost dosh.
  • Start with $1, 1%, 10%, 75% whatever you can legitimately manage sustainably.
  • PAY YOUR SAVINGS ACCOUNT THE MOMENT YOU GET THAT SWEET SWEET PAYCHECK.
  • $1 is better than nothing, $7 a week is $365 a year, for 10 years that is $3650.

Why save?

Saving over the long term gives the opportunity for compound interest to take place, this is an extremely powerful phenomenon!

Using your money as a “green minion” to work for you to create financial freedom for old age is one of the smartest things ANYONE can achieve very easily, this can be done via investments such as…

  • Purchasing stocks in companies (WAY EASIER THAN PEOPLE THINK, slightly risky)
  • Leaving money in a bank account with premium interest (not effective in my opinion)
  • Flipping items via eBay or trade me etc (I haven’t personally tried this however I know it is very effective but takes mad hustle and time.)

Amazing examples of compound interest, Calculated with Moneysmart.gov

Interest could range from relatively small (bank interest, 3% ) to if you’re a gifted investor such as warren buffet (20%) and Carl Icahn (31%), personally I believe a talented and wary investor who researches their stocks and continually learns could achieve 10%.

With an initial deposit of $1000 and a weekly deposit of $20/ $80 monthly at 7% interest (the average return of the stock market)

 

 

 

 

 

 

 

 

 

 

 

 

 

This is just one year, a generally small return especially in the interest department, however, if we continue this plan of an initial deposit of $1000 and a weekly deposit of $20/ $80 monthly at 7% interest for 5 years a different picture begins to show.

This shows how our interest now equals our initial deposit in just 5 years while throughout this period we have only been giving up $20 a week starting off with $1000. This is the magic of compound interest, the interest made every year contributes towards the next year’s interest, therefore, it compounds, this is why this is SO effective over the long term. 5 years is a pitiful amount of time. If we continue this plan for 10, 15 and then 20 years. Assuming you start this plan at 20 you will be 40 at this point in your life and therefore have adult responsibilities such as buying a house (another investment). These age ranges are displayed below…

Of course, this can be changed to any person’s needs, the initial deposit can be increased or decreased and the weekly deposit can be changed, please realise that the money is STILL THERE and the money will GREATLY increase if the deposits increase and over time the interest to deposit ratio drastically expands, at 45 years of compounding with this plan (retirement)

  • Total Savings = $318,182
  • Regular deposits = $46,800
  • Total interest = $270,382

Stop wasting the precious resource that is TIME and JUST START

Starting is the best thing you can do for your finances, saving money is easy if you develop the self-discipline to get your finances on point, it doesn’t take much effort at all once it is set up but taking a few mental hurdles and saving obstacles to begin but once you have begun it is a force that is unstoppable, it is financial insurance that could help you realise your dream or afford that house or send your children to college (or spend your last years travelling in luxury).

Desiring money is not some evil thing, to desire money is to desire safety, power and in some cases a happy and safe life, money can be used wrongly but overall if put in the right hands it can do unfathomable good.

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