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Saving money isn’t easy.
Do you often feel like you’re stagnant, living from pay check to pay check?
I’m going to show you one simple habit that will enable you to save money each month.
It may be five dollars, it may be five hundred dollars — the amount will be proportional to how much you earn. However, I guarantee you’ll significantly increase how much you save.
The Daily Finance Check
The daily finance check is a simple, 30-second habit that will change the way you think about your money and enable you to save money effectively. If you’ve tried budgeting in the past and failed or want to get a better handle on where your money goes every month, this is for you.
Many of us struggle financially.
75% of American adults live paycheck to paycheck and only 32% of Americans maintain some kind of budget. UK citizens have an average of £8,000 of debt each, not including mortgages. 6 million Brits fear never being debt-free.
Rather than focusing on cutting back, the solution is to build a simple daily finance habit instead.
In just 30 seconds a day, you can make sure your on track to meet your savings goals, spending within your means, and getting the most value possible for your money.
Here’s how it works:
1. Know Your Free-to-Spend Number
First, take your post-tax salary number. For simplicity, let’s say it’s $5,000 per month.
Then, subtract your monthly bills — things like rent, cable / internet, and phone; let’s call this $1500.
Now, subtract the amount you want to save every month. Let’s say that’s $1000.
The remaining amount ($2,500 in this case) is the amount you have free to spend on discretionary items this month.
Divide that by the days in the month, and you’ve got a free-to-spend number for each day.
Things get so much simpler when you know you can spend $83 dollars today.
By starting with this number first, you ensure that you pay your bills, and yourself, first, before spending money on anything extra.
2. Track Your Spending
Your goal is to spend no more than your free-to-spend number above. To do that, you need to know how much you’re spending day in and day out.
You can do this by adding up your transactions from your bank accounts and credit cards every day in a spreadsheet. Record every transaction and label it as income, a bill, or discretionary spending.
As long as your discretionary spending stays below your free-to-spend number you’re good to go!
If you want something easier though, I’ve been using the free spending tracker app by Swish.
The app links securely to your bank accounts and calculates all this for you. It will also remind you every day with a text message or push notification to check in on your finances.
3. Eliminate Waste
Only after you’ve built this habit should you start thinking about cutting back. Remember, if you try to live like a hermit, you’ll never actually stick to your budget.
But since you’re checking in on your money every day, it’s much easier to decide if buying something is actually worth it to you. You’ll start to realize which purchases make you happy, and which ones don’t.
Ask yourself if you really need that new pair of shoes or that extra drink. Consider whether you’ll actually use that new kitchen gadget two months from now.
If yes, go for it! Make the purchase.
If not, save the money until something better comes along. Your future self with thank you for it.
How To Save Money Effectively — Making It All Work
Changing your behavior can be notoriously difficult, especially when it comes to money. If you’ve struggled in the past with budgeting and failed, the daily finance check-in will feel like a breath of fresh air.
You can ditch the complex budgeting software and eliminate the pressure to cut every little expense.
This habit can be a keystone to your overall inner peace. Once you’re comfortable with your finances, it becomes much easier to focus on your spouse, leave a job you hate, and find meaning in simple everyday activities.
If life is feeling tough and you want to take better care of yourself, I highly recommend trying the daily finance check-in. The results speak for themselves.
And why not check out one of my 30-day self-development challenges and bring both peace and productivity to your life.
Over and out.