Slow Money Rules
If the concept of getting rich slowly doesn’t appeal to you then I’m sure the idea of not getting rich at all doesn’t sound too good either! Unfortunately, what I have come to realise is that getting rich slowly is really the only option, short of winning the lottery which, let’s face it, is highly unlikely.
Building wealth takes time, discipline and structure, which might sound a little boring, however some of the other ingredients are identifying what you’re passionate about and what you love to do, setting big goals for yourself and building a plan that will enable you to truly build the life of your dreams.
In my experience as a financial adviser, I have been fortunate enough to have shared in the lives and of course financial behaviours of many, many different types of people. This grounding, along with all of my formal education and training has lead me to develop the slow money principles:
Spend less than you earn
Sounds simple enough, but in today’s society filled with credit cards, personal loans and payment plans, it’s very easy to fall into the trap of spending more money each year than what you actually earn. If you always spend less than you earn, and do something with that leftover money, you’re taking the first step to financial freedom for yourself.
Begin saving and investing today
There is no reason to put off saving and investing for another moment, we need to stop thinking that we’ll start when we get a payrise, or pay off that debt, or get a new job. Putting something away, whether it’s into an online savings account, a managed fund, or a share portfolio, needs to start now.
Set lifestyle goals, link your wealth creation to those goals
Instead of putting money away just for the sake of it, spend some time with yourself and determine what kind of life you actually want to create. If you know what you want, and what amount of money you will need to get there, it’s a lot easy to stick to your savings or investment plan, as deviating will mean you are giving up your dreams.
Segment your savings and spendings
This is called ‘paying yourself first’. Set up an automatic transfer into a separate savings account on the day following pay day to ensure that you have put your savings aside before you get a chance to spend anything! Keeping your spending money isolated from your savings will help you to stick within your buget.
Track your spending and savings
With any goals in life, if we can track their progress we will achieve more. Financial goals are just the same, so once you have completed a budget and set some savings goals, find a way to track your spending and savings regularly. There are some great apps that do this, and many banks are now providing great online technology to help with this as well. An old fashioned paper spending journal will do just the trick too!
Evaluate your purchases and only accept value for money
Taking control of your wealth and looking for value for money isn’t about being tight or strict, it’s essentially about eliminating waste. By taking a moment each time you pay for something to ask yourself ‘Is this good value and is this something that I value?’ you’re giving yourself the opportunity to decide, instead of just spending. You’ll be surprised and empowered by the results.
Disclaimer: Please note this article is of a general nature and should be used for informational and educational interest purposes only. Please seek professional advice before making any decisions in relation to your own personal circumstances.