Building A Savings

 

While there’s no true ‘secret’ to building a savings, there is an ideal approach (one that you’ve probably never considered).

What I mean is, you already know how to build a savings:

Just spend less than you earn. Keep your income over your expenses. Live within your means.

When you can consistently spend less than you earn, your savings has no choice but to grow, and you’ll be out of the paycheck-to-paycheck lifestyle.

So, your logical, go-to solution is to cut spending. No more eating out, no more fun trips to the mall. No more wine (ok… less wine). You’ve got to cut the unnecessary expenses and spend less money.

WRONG!

CUTTING EXPENSES

DOES.

NOT.

WORK.

Really, cutting expenses can only go one of two ways (and they’re both horrible):

d 

While there’s no true ‘secret’ to building a savings, there is an ideal approach (one that you’ve probably never considered).

What I mean is, you already know how to build a savings:

Just spend less than you earn. Keep your income over your expenses. Live within your means.

When you can consistently spend less than you earn, your savings has no choice but to grow, and you’ll be out of the paycheck-to-paycheck lifestyle.

So, your logical, go-to solution is to cut spending. No more eating out, no more fun trips to the mall. No more wine (ok… less wine). You’ve got to cut the unnecessary expenses and spend less money.

WRONG!

CUTTING EXPENSES

DOES.

NOT.

WORK.

Really, cutting expenses can only go one of two ways (and they’re both horrible):

 

How many times have you tried to cut expenses in the past? (Probably more times than you’d care to count). And the same cycle of events ensue:

It goes well for a couple weeks to a month, but then something inevitably comes up:

> The check-engine light pops on

> Your family comes in town, and you’ve got to take them out to dinner.

> The Nordstrom anniversary sale is starting, and you can’t not pass up on their awesome deals….

And before you know it, you’re back to the same old spending habits. Your dismal savings remains dismal, and you’re still living paycheck to paycheck.

So you cut expenses and saved $5K+… What’s your plan moving forward?

Do you continue not spending your money? Do you keep dragging your spouse through this never-ending, ‘bare minimum’ existance? Sure, it’s nice to be out of the paycheck-to-paycheck lifestyle, but not spending your hard-earned money isn’t much of a life either.

And even if you do start spending money again, it won’t be an enjoyable experience. Because you know how effortless it is to fall back into those same bad money habits. You know how quickly you could drain that $5K (that took months to build) down to nada.

When you cut spending in an attempt to build a savings…

There is no desirable outcome.  There is no finish line.

It’s just misery.

Want to effortlessly build a savings?

Stop trying to build a savings! Instead, learn to spend your money correctly.

Let’s dig in:

To ‘cut spending’ means to spend very little of each paycheck and use what remains to grow your savings. But as we just discussed, this does not work.

Can you see the difference?

Don’t make random, expense-cutting decisions such as:

“No more eating out.”

“No more shopping online.”

“No more vacations.”

(This is depressing…)

Instead, look at each paycheck and create a logical, unemotional, money-based plan.

Given this month’s income:

“What’s the most we can spend at restaurants?”

“What’s the most we can spend shopping online?”

“What’s the most we can spend on a vacation this year?”

When you spend your money correctly, you’re NOT cutting expenses.

You’re harnessing your money’s fullest buying potential. You’re taking control of the money you earn right now.

When you learn to spend your money correctly, money anxiety goes out the window.

+ You can confidently pay your costly car insurance bill.

+ You can get through Christmas without going into debt.

+ You and your spouse can finally be on the same page and start working together as a team (no more pointless money fights)!

And as for your savings… that has no other choice but to grow. Just keep your focus on enjoying your money, and every financial goal will get accomplished automatically.

You will have $20K in savings, you will become debt free, and you will retire with more money than you ever thought possible.