Making Money But Can't Save? Here's A Simple Solution for Business Owners and Creatives
If you have money coming in but it feels impossible to save any of it, you’re not alone. Luckily, there’s a simple solution that can your grow your savings account quite quickly And the best part, it’s free to do. Join me as I show you how. (If you prefer to watch the video, please check it out here…)
My name is Lucas and welcome! At 38, my business was thriving and the money was coming in BUT…. It was going right back out and if the income stopped, I was screwed. I had no backups and zero savings.
Now, a few years later, I have several emergency funds, a sizable savings and most important to me, I’m no longer living in survival mode, constantly worried about money or borrowing on credit to get by -
How? Let’s get into it…
Imagine that you’ve not eaten all day and you’re starving. You sit down with some friends for dinner and when the meals finally arrive, your’s plate gets passed down the table. A few friends comment on how delicious your meal looks and so you being the kind person that you are, offer them a bite.
By the time the plate gets to you, there’s barely anything left. Just scraps. How do you feel? A little hangry?… Because this, is what most of us are doing with our money. We give it away to everyone else and then we try to survive on the scraps…
Think about it..
How much did you make last year? And out of all that money, how much did you keep?
How much is in you savings account right now? Anything? Each month we go to great lengths to ensure that insurance companies, banks, the government and netflix get plenty of our money but what about you? Where’s your cut?
There’s nothing wrong with paying our bills. They problem is, WHEN we pay our bills. You see, currently, we get paid, we give it to everyone else first, and then there’s nothing left to keep..
But… when we change the order - The money comes in, we pay ourselves first and then spend, everything improves.
Netflix and the government still get a cut but now, maybe for the first time ever, so will you. So how do you pay yourself first?
Step 1:
Choose to make yourself a priority. If you’ve been wanting to save up, build emergency funds or get rid of the debt that’s been hanging over you - choose to make yourself and your financial needs a priority.
One of my clients, Jake, had 16k of debt and he really wanted to save up for his first investment property so he CHOSE set a goal to to take care of both, started paying himself and his needs FIRST and within 6 months, he wiped out the debt and grew his savings to 20k. Not bad for a simple change of habit. And if you want to see details of how he did it, check out this video.
Step 2:
Pick a starting percentage and set a goal. Jake’s started off paying himself 40% of his income and put that towards his debt and growing his savings. If I remember correctly, I think he even bumped that up to 60% when he could. He achieved his goal quickly because he made himself a priority and had a simple plan to achieve them.
I’ve also had clients start off paying themselves 1% as a symbolic gesture, just to get into the habit and then bump it up to a more impactful number once they had a rhythm. So pick a starting percentage, something that’s realistic and achievable for you, then set a goal and get to it.
Just one or two of these can keep us from achieving our financial goals, no matter how much money we bring in. But when we bring awareness to our day to day financial habits, we are now in a position to make better choices.
Step 3:
Every single time you receive money, pay yourself immediately. Get into the habit. I have alerts set up so that every time I get paid, I stop what i’m doing, log into my bank and send a percentage to my savings immediately. It takes me about 4 minutes.
Some of my clients prefer to do it first thing with their morning coffee. They like to start their day off with taking care of themselves first and I LOVE that! So, create a habit of paying yourself first and make it fun so that you look forward to it..
Give your savings account a nickname - I call mine the Pay myself first because It’s meaningful to me. I have a client who sets a goal, currently to buy a new car and house and so he nicknamed the account House and Mercedes - now, he LOVES watching as he gets closer to achieving his goals with each deposit.
And one final tip..
Once a dollar goes into the Pay Yourself First account, make a commitment to yourself that it doesn't not come out, for any reason, until you achieve your savings goal. No matter how tempted you are to spend from it, promise yourself and stay committed.
That’s why nicknaming the account be helpful. If you want to buy a new tv or shoes but have to “steal” from your new house fund and then delay that goal, you’ll probably think twice which means you now have more accountability for your spending.
Now, if you’re thinking, “Lucas, this all sounds great but I don’t have any extra money to pay myself”… Of course you don’t, because you’re giving it away to everyone else FIRST. So,
Recognize what you’ve been doing with your money and then CHOOSE to take care of you FIRST. Your bills will still get covered and now, so will you.
I ignored this simple habit for 2.5 decades because frankly, it seemed insignificant and ineffective. How could “showing myself some love” possibly improve my finances? But my savings account improved in the very first month and that’s all the proof I needed.
I know the idea seems pretty simple, maybe too simple for some of you but there’s a reason every guru, financial and spiritual, have been pointing to this simple habit for centuries.
“When you say yes to others, make sure you are not saying ‘no’ to yourself.” - Paulo Coelho
When we turn our attention inward and learn how take care of ourselves first, Everything, including our savings account, improves!
Thank you for your time and energy. I’ll see you in the next one.
Lucas Z.