"Habitize" Your Savings - A Reward System Leading To Wealth.
I was listening to one my favorite podcasts recently, Afford Anything, and this episode about building incredible habits.
It went into way more detail about starting new habits than I will here, so be sure to give it a listen, got it?
Here's the link again for the Afford Anything Podcast.
One thing that stood out for me is that it's harder to create a new habit of NOT doing something, versus a new habit of doing something. Sounds weird, right?
Well what do you call a "habit"of saving the money buy not going out to dinner and dining in instead? Or not spending it on that daily latte? ('because the cost of one latte a day, invested over 30 years with an 8% compound interest is approximately ten millions dollars..slight exaggeration.)
Is it a "non-habit"?
I don't know. Years ago, before I ever listened to this podcast, I looked into my spending and found out what I call little "Money-suck habits".
On their own, they're small, no big deal things I did out of habit. Out of curiosity, I quantified them by figuring out how much money it cost me each time. Then I calculated how much I spent per month.
Then per year, then per decade.
Here's a great example.
Glass of wine once a week at a French restaurant while I waited for the train.
Cost Per visit: $15-17.00 (including tip).
Frequency - Weekly.
Cost per month: $60.00-70.00
Cost per year: $720.00 to $840.00
Cost per Decade: $7,200.00- $8,400.00.
Imagine uncovering five to eight more equivalent Money-Suck habits, eliminating them, purposefully saving them, and seeing how it adds up over a decade?
Based on the above example, uncovering eight more "Money-Suck" habits, you'd be able to save $67,200.00 over ten years, a mere $560.00 per month.
Wow. If you invested that every month over ten years, getting 8% return, you'd get $104,375.78.
Now, do you really want that Rosè just to kill 20 minutes?
How to make this work?
You have to put forth the effort, look at your spending, find patterns, see your behaviors and and AUTOMATE your savings. This won't work if you don't automate your savings once you've figured out your Money-Suck habits.
Automate your savings and apply it to the goal of your choice? When I came up with this I applied it to paying down my Home Equity Line of Credit that was my 2nd mortgage.
How will you use the money you save once you find and kill your Money-Suck habits?
It went into way more detail about starting new habits than I will here, so be sure to give it a listen, got it?
Here's the link again for the Afford Anything Podcast.
One thing that stood out for me is that it's harder to create a new habit of NOT doing something, versus a new habit of doing something. Sounds weird, right?
Well what do you call a "habit"of saving the money buy not going out to dinner and dining in instead? Or not spending it on that daily latte? ('because the cost of one latte a day, invested over 30 years with an 8% compound interest is approximately ten millions dollars..slight exaggeration.)
Is it a "non-habit"?
I don't know. Years ago, before I ever listened to this podcast, I looked into my spending and found out what I call little "Money-suck habits".
On their own, they're small, no big deal things I did out of habit. Out of curiosity, I quantified them by figuring out how much money it cost me each time. Then I calculated how much I spent per month.
Then per year, then per decade.
Here's a great example.
Glass of wine once a week at a French restaurant while I waited for the train.
Cost Per visit: $15-17.00 (including tip).
Frequency - Weekly.
Cost per month: $60.00-70.00
Cost per year: $720.00 to $840.00
Cost per Decade: $7,200.00- $8,400.00.
Imagine uncovering five to eight more equivalent Money-Suck habits, eliminating them, purposefully saving them, and seeing how it adds up over a decade?
Based on the above example, uncovering eight more "Money-Suck" habits, you'd be able to save $67,200.00 over ten years, a mere $560.00 per month.
Wow. If you invested that every month over ten years, getting 8% return, you'd get $104,375.78.
Now, do you really want that Rosè just to kill 20 minutes?
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| Source: fncalculator.com IoS app |
How to make this work?
You have to put forth the effort, look at your spending, find patterns, see your behaviors and and AUTOMATE your savings. This won't work if you don't automate your savings once you've figured out your Money-Suck habits.
Automate your savings and apply it to the goal of your choice? When I came up with this I applied it to paying down my Home Equity Line of Credit that was my 2nd mortgage.
How will you use the money you save once you find and kill your Money-Suck habits?
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