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Money for nothing...

Written by Christoph Schnelle and published in the October / November 2015 issue of Style magazine

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In a famous Sex in the City episode Sarah Jessica Parker’s character Carrie has the opportunity to buy her apartment. She needs a $40,000 deposit - which she doesn’t have. Her friend Miranda calculates that she has spent $40,000 on Manolo Blahnik shoes in the past.
 
This might seem outrageous behaviour, or it might seem like a way to live and enjoy life. When we first earn money, there is nothing wrong with enjoying it and doing things like buying expensive, good-looking shoes.
 
At some stage though, we will realise that this type of behaviour can limit what we are able to do with opportunities that come along, just like in Carrie’s situation. Or we may want to start saving for a big expense like a holiday, a car or a home deposit.
 
But how do we do that?

​Some people are naturals – they spend less than they earn and money accumulates in their bank account. However, for many of us humans this strategy doesn’t work. There is always a good reason to spend more and despite our best efforts our bank balance never seems to increase.  

A simple method to side step this scenario from continually playing out is to hide your savings from yourself. This is easily done with a second account – a savings account (not just in name but by nature too). If you put a fixed amount in every payday and budget for savings, it’s as though you don’t have the money to spend. After a while your lifestyle adjusts, a nice sum has accumulated and you’ve set yourself up to save.
 
You may discover along the way how good it feels to have a growing savings account. When you can see your savings grow there is often a motivation to save more. The next level is to put any windfall or irregular income, like your tax return, into your savings account. You could find ways to earn extra income, or even better, at your work by getting paid more. Some or all of that extra money can immediately go into your savings account.

The whole point with savings is to be playful about it and to enjoy it. If you make it a burden it tends not to work.  But if you start out small and do it just for fun, the outcome can be different. As your money accumulates, you can make choices, you can act on opportunities and you can even buy another pair of expensive shoes. Over time your habits can change and you will be well on your way to accumulating some substantial wealth, but that is another story….