When you don’t have a foolproof system in place for handling your cash flow, you can end up feeling like you’re always overspending and never saving enough.
Every time you order food or buy something online, every dollar you spend gets tinged with shame and guilt. It’s a terrible spot to be in.
The way out is to build a system for handling your cash flow and automating your savings.
Typically, I help people do this by using one account for all their fixed expenses (like their mortgage or rent, savings, car payment, utilities, insurance, etc) and another account for all their variable expenses and day-to-day spending (like groceries, ordering food, shopping, etc).
The big benefit here is that it removes all the mental math and willpower from the equation. Every month, you know that all your big regular bills are taken care of and that all the money you see in your spending is yours to spend guilt-free.
You never have to worry about whether you already made your car payment or not. You don’t have to keep track of everything in your head. And you know you’ve already saved the amount you want to save, so you don’t have to struggle to have some leftover at the end of the month.
And sure, in theory, putting a system like this in place does put a hard limit on your spending, so you can’t just buy whatever you want and hope it all works out in the end.
But in practice, when clients put this system in place they are almost always surprised by how much money they have leftover to spend and get so much more joy from spending it.
In the end, financial planning isn’t just about saving money. It’s about improving the quality of your life. When you have a system and plan in place, you have less stress, more peace of mind, and the ability to spend your money more freely.
What do you love spending money on most? What recent purchase has brought you joy?