Are you spending too much and saving too little?
We’ve found that most people with less than 5 bank accounts across 2 banks, will find it really hard to control their spending and save consistently.The 5-2 system will free up more of your income for fun, holidays and saving for your future.
I’m Max Phelps, a Money Coach from Golden Eggs.
Context:
If you’re on a career path in the city, It’s easy to believe that the cost of living is expensive and saving will be easier after the next pay rise, but isn’t that what you thought before the last pay rise?The real problem is that banks encourage us to have access to all our income and more and it’s in our nature to use all the available resources.Imagine someone trying to maintain their weight, while eating at an unlimited buffet for breakfast, lunch and dinner every day? We tend to eat more when there’s more available and we tend to spend more when there’s more money available.
Value
The great news is that access to money is easy to fix in 3 steps.
1. Separate bank accounts into at least 5 different pots, to know how much you have for each type of spending
2. Then splitting accounts across at least 2 banks, so variable spending is with one bank and fixed spending and savings are done with a different bank with no card access.
3. Get your income paid into the bank that you CANT access, then you can put a fixed amount into your variable spending bank.
Yeah But…
You’re probably thinking, yeah but, I put everything on credit card to get points.
Going back to our food analogy, that’s like saying, ‘but the buffet gives free gym access’.We all know we’ll eat way more at the buffet than we can burn off in the gym. And after studying people’s behavior with finances for 10 years, I know anyone can save enough with the 5/2 approach to be able to pay for the formerly ‘free travel’ and save more to invest in property.
Martin and Amy thought the same thing when I met them 2 years ago, but based on the rate they were saving year to year, not monthly, which they would dip into, it would take them 8 years to save the deposit for a house.They implemented the 5-2 system, which we adapted to 7 bank accounts across 3 banks for them and 2 years later, not only have they bought their first home, but they also took maternity leave and have an almost 1 year old baby.You can’t get either of those with points!
The Point
Once you rearrange your banking to fix your variable expenses and unlink them to your income, then you’ll find the more you earn, the more you save.The more you save, the faster you’ll buy a property and the better the holidays you’ll go on.
Next Step
To find out more, google ‘Golden Eggs Info’ and email or phone to ask us when our next free workshops will be.These genuinely free workshops will show you how to manage your expenses, hit your savings goals and how to get into property without over-extending yourself.
Thanks for watching. I’m Max Phelps and may you live long and prosper.