Table Of Contents
Short TLDR answer
- Step 1: main bank account receives all incoming money
- Step 2: create digital savings account for one purpose – SAVINGS. No debit card to this account.
- Step 3: every month when money from salary gets banked in, X amount goes into savings account.
- Step 4: spend only from main account
I spend from main account only, and whatever is in savings account, I send majority if not all into income-generating-dividend stocks. Not only does my savings happen automatically, it is used mainly to grow my investment portfolio.
I thought everyone does this (because it’s second nature to me), and I realized that I’d been doing this intuitively/logically for years, but it’s not the most natural thing for everyone…because most people’s nature is to either
- Spend all they have / can OR
- They have too much bills and too little month
The 50% solution for problems #1 and #2
- Problem #1: Spend all they have / can is more of an impulse problem
- Problem #2: They have too much bills and too little month — can be a combination of impulse problem as well as not earning enough
I’m gonna write about dealing with impulse-buying.
Personally, I know that I am not very strong-willed, because I have finite energy. When I’m alert and well-rested, I’m super on the ball and I can make the best decisions….but conversely, I realize that I make really, really stupid decisions when I’m tired (such as end of the day) or when I have too much money (eg more than $1K in my bank account).
- At the end of the day, my ability to eat healthily goes out the window. One tub of ice-cream? Sure, why not 2? Lol.
- When I’ve $1K in my account, I get itchy and wanna spend. And once I’ve spent it, the next day, post-spending clarity sets in and I ask myself: why the fuck did I buy this rainbow sock?
I’ve too many examples where willpower is sexy but it doesnt work all the time. So I’d rather get willpower out of the way and make it a system. Make earning more money or investing more money automatic.
Then my approach will work for you ie automatic deduction into a hard-to-reach bank account. I make it even harder to squander that savings by immediately using the savings to buy income-generating dividend stock.
Well if I’m gonna use it, I’m gonna buy shit that makes me more money right.
Earning more is never wrong
Eemotional/brainless/impulse-buying is one thing, and I can circumvent that to an extent by auto-savings like above.
BUUUUUUUT 50% of the time, most of our money problems will be solved by simply earning more. In fact, let me take it one step higher:
Nothing, and I mean nothing, beats earning more – it just opens up more flexibility and choices be it in spending and investing.
I will write and share in a different post. Today, we’ll just talk about dealing with that monkey/lizard in our brain that just wanna spend and fuck.
I’m the founder and writer here at NigelChua.com; as well as serial entrepreneur, therapy business entrepreneur, digital entrepreneur, investor and also happy husband, father and Christian.
Started and sold off a business for 7-figures; built another 7-figure one and growing it further, plus building/investing into other businesses and investments as well as advisory works.
Nowadays I share and teach entrepreneurship, financial independence, retiring early as well as building and living a life you love.
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