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How to Change from a Spender (100|0|0) to a Saver (80|10|10).

How to Change from a Spender (100|0|0)  to a Saver (80|10|10).

So what’s with all of these numbers anyway?

The spender can look something like this: 100 | 0 | 0

Live” with 100% of your monthly income.

Save” with 0% of your monthly income.

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Give” with 0% of your monthly income.

And the saver can look something like this: 80 | 10 | 10

Live” with 80% of your monthly income.

Save” with 10% of your monthly income.

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Give” with 10% of your monthly income.

So what are you: a spender or a saver? If you are like me, you are probably somewhere in between and your significant other is unlikely to have the same numbers as you do. There is some math to this, so be prepared to have pencil and paper in hand.

The challenge is to change your numbers so you will never revert back to being that “spender” ever again! Change your numbers gradually by a small percentage (1 to 4% each quarter) and in 8 quarters (2 years), you will be where you want to be!

Let’s start by doing a reality and motivation check.

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The reality of our culture is to collect “stuff.” George Carlin, the late comedian, had a comedy sketch that nails this. George did not always use delicate vocabulary, but he sure could make you remember his point.

Our motivation to be a saver (and not a spender) is weakened by our desire to live in “ATM” mode. We like the freedom (but not the responsibility) of getting anything we want whenever we want. The secret here is timing. Go ahead and plan to spend what you want—but not all right at this very moment. Take your time (the rest of your life) doing it. The more you think about the value of your spending, the less money you will need to acquire the lifestyle that you want. It is also a sustainable approach, and that will motivate you to spend “wisely” and not “quickly!”

Say you go out to a flea market and buy a thing-a-ma-jig for almost nothing! What a great purchase, right? You put it in the garage (where the car could go)  and 3 years later you realize that you haven’t used it once. You decide to donate it to Good Will and at least recycle it.

Three years ago you also spent some serious coin on a really nice self-propelled grass mower because you have too much green on your property. You own two blades and you keep them sharp which helps you get a clean cut on your lawn. You now have to buy another one because you just plum wore the thing out. Now which was the better purchase?

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Well, now it’s time to do this spender-to-saver conversion plan, so let’s get organized. There are three steps that will get you on the road to abundant living.

  1. Track your debt and start eliminating outstanding balances.
  2. Live below your means. You can do things to reduce the cost of living AND increase the quality of your life.
  3. Save using a three bucket accumulation plan, sequentially at first and then concurrently, once you are in the savings groove.

First, go here to download your complementary copy of your Debt Trakker. Complete ALL the debt metrics because you need them to decide what to pay minimums on and what to target as your first debt victim.

Second, go here to download your complementary copy of your Budget Master. This organizer is a real eye opener and will tell you two things. It will show you where your spending makes you feel bad and where your spending makes you feel good. And I’m NOT talking about how much “stuff” you are accumulating along the way. Keep working on it until ALL your spending makes you feel good. And spending includes saving and giving.

Third: now it’s time to do your lifetime planning. Click this (Cash Flow LifeLine & Three Bucket Savings Plan) and download your handy-dandy worksheet and map your future. It gets you started on your savings path that includes cash reserve, non-retirement savings, and retirement savings.

You will start taking debt payments (once you pay off balances) and convert them into savings and giving payments. Start by fully funding cash reserves (6 months of monthly expenses covered between bank savings and unused credit lines). Then start saving for non-retirement items such as cars, homes, education, dental, eyes, vacations, remodeling. Once your cash reserves are in place and some non-retirement savings are accumulated, then you can start to fully fund retirement. You should have assassinated your debt balances by now and could have more monthly cash flow to fund your future. Remember that you are likely to live longer than you think, so go crazy with your savings. And, for the record, savings IS future spending!

Plan to spend it all, but not right now!

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Last Updated on March 29, 2021

Life Insurance: A Secure Way To Protect Your Future.

Life Insurance: A Secure Way To Protect Your Future.

Life is a journey full of ups and downs. No one can actually predict what might happen the next moment; there are times where the happiest moments do not even take a second to turn into the gravest. Planning for your future can help you face such unwelcomed but irrepressible situations with much ease. We all want to make every memorable event of our life more special and to cherish all those moments happily and worry less, you must financially plan your future. But no one has control over life and death. Who would wish to see his family suffer in his absence? Insurance hands over the financial jeopardy of life’s happenings to an insurance company.

Importance of getting a life insurance

No one has control over life and death. Nobody would like to see their family suffering in an absence, and that’s why many people recommend life insurance. A life insurance plan is one of the best ways to secure the future of your family, even against those financial troubles after an untimely demise. These plans are safe and credible, and you could trust them for your family’s better future.

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On the other hand, a life insurance policy is a contract between a company (insurance provider) and policyholder in which the insurance provider ensures to pay a certain amount of money to the nominated beneficiary in case of the policyholder’s death during the term of the agreement. There are different types of insurance plans, and it is important for you to know the benefits of those plans such as a funeral, medical or some life expenses provided they are mentioned in the agreement.

Choosing the right insurance plan

If you’re about to select an insurance plan, you should consider some important factors:

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  • The time at which you start investing in a program and the number of family members you want to get insured. Obviously, a married man with two children has different needs compared to a single one. The number of persons who are dependent on an individual also varies from person to person.
  • The next thing you need to consider is you and your family needs. What are your child’s dream, your retirement plans, for how long would your dependents need financial support, any personal injury, etc. And do not forget those events or situations that will surely demand a huge sum of money.
  • The next thing one must consider is your current income. You should preferably choose a plan which you can afford.

Now you must be having a pretty clear idea of how to choose the best plan for you. Further, you should also compare various plans offered by different companies and numerous sites available online that help will you to compare them.

Differences between life insurance plans

Here’s a short brief of some plan categories you can choose according to your needs:

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  • Term Insurance Plan – You have to pay once, and your nominee gets the paid money under your misfortune demise. It ensures a person for a fixed time. If you survive the policy period, you do not get your premiums back.
  • Whole Life Policy – This plan continues for your lifetime. Under this, the policyholder has to pay regular premiums, until their death.
  • Endowment Policy –  In case the individual dies during the tenure, the beneficiary gets the amount assured. If the person survives the policy tenure, they gets back the premiums paid with other investment returns along with several other benefits.
  • Money Back Policy – In this a portion of the money invested is returned to the investor at regular intervals. If you survive the insurance term you get the entire amount back; else the beneficiary receives the entire sum assured.
  • ULIPs – These are the life insurance plans that offer you future security plus wealth creation options.

Many people do not opt for whole life policy and endowment policy because of the high amount of money you need to pay, while others may prefer to opt for these if they have a high life expectancy. Surely you will find the best one for you.

So what are you waiting for? Plan for your future and live a happier and carefree life today.

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Featured photo credit: aryehsampson.com via aryehsampson.com

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