What to Do With Extra Money in Savings
Let's start with, CONGRATULATIONS! You have a budget. You’ve stuck to it and now you have a savings account that actually has money in it. This...
3 min read
Yes! We are starting at the beginning. Why is it important to you to save money? When you know ‘why', saving money is exciting. And because the ‘why’ is yours, you are more likely to follow through.
That’s why we start with Your One-Page Financial Plan.
Get out a piece of scrap paper and your favorite pen. It’s important that you do this by hand because your brain works differently when you do.2
Ask yourself:
Why is money important to me?
–Write down the first thing that comes to your mind.
Then ask why again.
–What about (your answer here) is important to me?
And then ask why again.
And again. Go deeper, until you can’t go any further.
Here is what this process looked like for me.
–Why is money important to me?
*Because it allows me to buy things and experiences.
–What about buying things and experiences is important to me?
*It allows me to live a more exciting and full life.
–What about living a more exciting and full life is important to me?
*It’s important to me because I want my time on this planet to be meaningful.
–What about having a more meaningful time on the planet is important to you?
*It’s important to me because I want to leave a positive impact on the world and my family and friends.
–What about leaving a positive impact on the world, family, and friends is important to me?
*It’s important to me because it’s the way I’ll know that I have fulfilled my purpose in life.
Knowing your ultimate why is crucial to saving money. Willpower isn’t enough. You need an incentive.
Which is where your goals come in. Let’s add some fun to your ultimate why. Go big! What is your ultimate desire? Buy a house? Go on vacation? Get out of debt? Pay for your kids' college? Retire?
Now, let’s put it all together and tape it to your fridge. That’s right, you are going to look at that bad boy every single day.
Get a nice piece of paper. On the top write your ‘Why’. The grounding financial principle that you want at the forefront of your thoughts every time you want to spend money.
Under that write your goals. It can be a timeline, or just a list. Place your estimated cost beside each goal. But don’t worry about the numbers just yet. It’s on your radar for now, and we are going to come up with a plan for that together!
Then, share it with an accountability buddy. A spouse, parent, friend. Someone who you will check in with, and you can ask to check in on you. This is a journey best taken with a friend.
Got it? Congratulations! You have now found your core financial value. Your financial north star. And when you go to spend money, think: is this purchase in alignment with the paper taped to my fridge?
Financial peace of mind is possible. Especially for you.
Questions? Suggestions? Would you like to know more?
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Sources:
1.https://academic.oup.com/rof/article-abstract/25/4/1129/5824803?redirectedFrom=fulltext
2.https://www.forbes.com/sites/nancyolson/2016/05/15/three-ways-that-writing-with-a-pen-positively-affects-your-brain/?sh=4d9fe2dd5705