April 5, 2011 admin

Cash is King

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Generations lived without plastic cards. It is no coincidence that they found it much easier than we do to live within their means.

The challenge this month is to see if you can live on “CASH”.

Try and fail, but don’t fail to try” – Stephen Kaggwa

What’s in it for you? – Studies have shown that you may spend 25% less this month by doing this – this alone can jump start a financial savings plan for you.

Tools you will need

1.        Give some thought to what you need to spend money this month

2.        Create a weekly budget

3.        Withdraw the amount of money you will need weekly and put this money into envelopes –label the envelopes – food, entertainment etc

Why is the envelope system so powerful? – There are no spreadsheets, piles of receipts or frustrating budgeting exercises –  this is a simple financial planning tool. Simply look in the envelope. If there is money, spend it.  If there isn’t, don’t!

10 WAYS TO MAKE THIS EXERCISE A SUCCESS

1.       Avoid your image-conscious friends this month – are you spending money because of peer pressure and keeping up with the Jones’s?

2.       Go out sensibly – find inexpensive restaurants or avoid eating out except for special occasions.

3.       Visit friends and family at home and be creative in how you entertain yourself and your family e.g.  Picnics in the park.

4.       Be on the same page as your spouse or partner – get their “buy in” to have fun with this exercise and use it as a “hands on learning experience” of how “you and your family spend your money”

5.       Recognize your spending tendencies (and that of your family- and place limits on them (the envelopes come in handy here)

6.       Be like Nike – keep trying – just do it!

7.       Praise yourself every week whilst you do this exercise – being mindful of yourself and what you are doing is an important part understanding your relationship with money.

8.       Change how you think about money – calculate how much money (net) you make per hour regardless of whether you are a business owner, salaried or a contractor. Now apply this time factor to any purchase you make e.g. is that ____ you are buying worth 10 X, 20X, 30 X your time. This could revolutionize the way you spend money in the future.

9.       Put a note in your wallet “DO I REALLY NEED THIS”

10.   Remind yourself of this fact – “people spend more money if they can’t see what they are spending”.  Statistics show that people are more likely to overspend when their money is not instantly removed from their possession – living on plastic gives you a false sense of having more money to spend than you actually do.

“If you believe you can , you probably can. If you believe you won’t, you most assuredly won’t. Belief is the ignition switch that gives you the launching pad”  -Dennis Waitley

I would love to know if you did this exercise and what you learnt from it.  Please post me your comments.

If you would like a copy of a weekly budget template please contact me on susan@wealthcoaching.co.za and I will send you one.

Best Wishes

Susan Mercer-Williams

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