Can’t save money? cure this sickness now
So you had a “New Year resolution” that you’d like to save more money, and now that a few months have passed without much progress? If this has been a problem looping multiple times, I’m sorry to say that you have a sickness… that’s curable though!
Common HORRIBLE Concept
There is a common savings practice that came from nowhere:
Income - Expenditure = Savings
“Oh! There was a friends and family sale at LV yesterday! Did you get those cute ankle boots and jackets?” - Cha-Ching! $30K thank you very much.
“I’m just too stressed at work, I need to have a good night out with my friends. Let’s eat better!” - Cha-Ching! $3000 thank you very much.
So can you accurately foresee how much you save per month? Nope. You will never reach any saving goals because you’re just leaving it to fate. So days, months, and years go by… and before we know it, retirement age hits or we get laid off suddenly. Panic mode is on because it’s too late to save. The only options are the high-risk ones if we want to make money overnight. (Remember what we’ve discussed about the 3 elements for any investments? Time, capital and risk. Read more here).
THE CURE
The cure is simple. Have you ever heard of the differences between a Poor Man’s Mentality and a Rich Man’s Mentality? Adopt the Rich Man’s way where they stress on frontloading the work before taking action:
Plan + Discipline (action)
Put together a reasonable and actionable saving plan according to our goals, and take action with the highest discipline to execute it without fail, no matter if we feel like it or not in the mood for it.
EASY ALLOCATION METHOD
There are various ways to allocate our income into different savings, but my personal favourite is “41212” because it’s more reasonable. It works by separating our monthly income into 5 buckets, under these percentages:
40% Needs —> e.g. Mortgage, Food, Transport
10% Short-term savings —> 1-3 years short-term goals, e.g. travels
20% Long-term savings + Investments —> 10-30 years long-term goals, e.g. retirement passive income
10% Insurance —> e.g. medical, critical illness, life insurance (if you have unpaid loans like mortgage, or dependants like your children or retired parents), etc.
20% Wants —> BUY WHATEVER YOU LIKE! Go shopping! That’s the guilt-free spending bucket!
With this, we can ensure we are making steady progress for each of our goals while feeling a lot happier when we spend on our lattes, amazing dinners and shopping!
BONUS TIP
I highly suggest setting up automation to transfer the pre-set amount to the respective bank accounts on the second day right after you receive your salary - if you don’t see it, you don’t spend it!
If you want a tailored fail-safe saving system set up for you, book a free consultation now. Time is money, and it doesn’t wait for anyone! Take action before it’s too late.
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