Confidence. Certainty. Peace of Mind.
When it comes to their personal finances, few people would use these words to describe their feelings about money. When most people talk about their finances they say things like:
“I’m just terrible with money.”
“I worry about money all the time.”
“I feel so guilty when it comes to spending money.”
Why Is That?
I believe it’s because most of us have grown up with the idea that managing our money should just be simple, that we should automatically know how to do it. If we fail to handle our finances, it’s not because we haven’t been taught, it’s because we lack self-discipline and should feel guilty about our bad behavior.
But, as part of the Mindshift.money community, you know better.
You know that life shouldn’t be spent worrying about your finances, it should be spent enjoying every moment that you’re alive.
Stop Listening To The Banks
The truth is, the people telling you YOU are the problem are usually the banks and institutions who benefit from keeping you in debt! They profit through your use of credit cards, because you haven’t been taught how to plan for future expenses.
In Australia, the average credit card holder carries about $4,200 in credit card debt. In the US, that number is closer to $3,000 per credit card holder. And you know what? That needs to end now.
As part of our Financially Fit Bootcamp, we talk about crucial money principles that help you achieve your financial goals in a way that works for you, not against you.
What You Can Do Today
In this piece, I’m going to focus on one incredibly powerful practice you can implement today to get your money working for you.
Let’s call it “The 7 Day Rule.” When using this practice, you’ll get paid every seven days, automatically.
Sounds awesome, right? It is!
Let’s take a few steps back, and I’ll show you how this works.
First, do you remember the principle of Paying Yourself First and Live On What Remains (as long as you don’t go into any more consumer debts)?
But, how do you accomplish this?
The Power Of The Everyday Account
Through the powerful tools of Separation and Automation.
When you Pay Yourself First, you automatically put money into a separate savings account to pay your future self. You’ll create a Security Buffer, then invest using the overflow, while paying down your debt.
Next, you’ll create two more accounts: an Income Account and an Everyday Account.
The Income Account will be your main account where your paycheck is deposited. From this account, you pay expenses that don’t vary from month-to-month. Mortgage payments, insurance costs, monthly household expenses—any bills that are regular and predictable.
From your Income Account, you’ll automatically transfer money to an Everyday Account every seven days. From the Everyday Account, you’ll pay your lifestyle costs and expenses that vary from month to month. These can be gasoline, groceries, movie dates or anything you want. But when the money in this account runs out, you STOP SPENDING!
But don’t fear! You’re always only a maximum of seven days away from your next “paycheck” into this account.
You’ve built a boundary for yourself allowing you to Live On What Remains and not overspend.
But this is about far more than just having different accounts.
Building A New Financial Future
By using Separation and Automation for your bank accounts, you’ll gain Confidence that you can spend your money without guilt.
You’ll have the Certainty of knowing you’re not going to spend the mortgage money on groceries.
And by automatically transferring funds to your designated accounts, you’ll have Peace of Mind knowing your money is being managed without your active involvement!
Don’t Give Your Money Away
You work far too hard for your money to have every penny go to someone else. Other financial advisors will say to pay everyone else and all your bills first, then save whatever is left over. Except that’s usually nothing!
Start making your money work for you. Pay Yourself First, Live On What Remains, and use the tools of Separation and Automation so you have the resources to invest in the future you desire. Build your future Financial Freedom knowing you’re only seven days away from more money in your Everyday Account!
Share in the comments below! Have you set up your Everyday Account? How has making that change improved your relationship with money?
image credit: Bigstock/Rawpixel.com
Dr. Tony is the co-founder of MindShift.money and the best-selling author of three books on personal and business finances. Having achieved Financial Freedom at 27, Dr. Tony believes that through Financially Fit Bootcamp and Cash Flow Cure everyone can get there. He has made it his life’s mission to help others live a life where their money works for them—not the other way around.