Consumer-oriented businesses have become exceptionally good at convincing you to spend money. Demographic studies, web-browsing history, social media information, and purchasing patterns all can help companies identify who you are and what you’re likely to purchase in the future. A consumer-product company has a pretty good idea who likes their stuff and may be likely to buy from them in the near future. They can more-or-less carpet-bomb you with advertisements for a period of time and influence your buying decisions.
They can also make it extremely easy to spend your money. Stored debit and credit card info, Shopify, Google Pay, Apple Pay, Affirm, Klarna, Paypal, Venmo, Cashapp and a myriad of other digital payment services can help you spend money without even getting your card out to enter information with a retailer.
Make no mistake, technology is EXTREMELY good at getting ahold of your wallet and helping you to drain your bank accounts.
Thankfully, that same technology can help you actually SAVE money more efficiently too. And thanks to our proclivity towards subscriptions, you can harness that same power to pay yourself.
Make yourself a subscription. Most digital banking apps allow you to set an automatic transfer that syncs with your payday. Open an account at your bank that’s separate from your everyday checking. Set a periodic transfer to come out of your account that syncs with your payday. Have an amount drafted from your checking the very day you’re paid and let it go into that separate account. Never stop. Don’t worry about the interest that it may or may not accumulate for a very long time. Let it just add to itself.
Is it the most mathematically efficient way to save money? Absolutely not. You probably won’t earn a ton of interest in this separate account as it’s likely to be a money market or regular savings account.
What it does, though, is provide you with real, tangible wealth. Something you can SEE. Something you can be very proud of being able to put together. Emotionally, it can help you become excited about growing wealth and saving real money.
It’s not a retirement account. It’s an emergency fund. It’s an opportunity fund. It’s a way to show yourself that you CAN be disciplined and you CAN put money aside. You’re making YOU a priority, not your Netflix account or your creditors or your cell phone bill.
This type of saving can become addictive in the best of ways. It can help establish financial discipline. Growing it has the potential to help avoid impulsive spending and change your entire viewpoint of money.
Try it. Put $20 or $50 or some other amount every single pay period. Start small. Make it an amount that really doesn’t change your standard of living. Watch it grow. Don’t touch it unless something catastrophic happens. Maybe over time you can bump the amount up a little. But make it non-negotiable.
This isn’t money you’re saving for retirement or any specific purpose. It’s about creating positive habits that can help your psychological relationship with spending. We all spend money on things that benefit others. It’s time to spend on your future!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
No strategy assures success or protects against loss.