Financial discipline is definitely something that is easier said than done.
What if there was something that could make it far simpler and easier to manage your finances and it is at your fingertips right now?
Chances are you are with a bank that has online banking. Provided that bank has updated their internet technology since about 2005 then you should have the ability to set up automatic periodic transfers from your transaction account to wherever you like.
Now if this sounds really basic, it is, but bear with me.
I want to take a moment to talk about the things we purchase everyday. There is a very valid reason why so many things in shops end their price with .99. It’s called psychological pricing and it works by tricking the brain into thinking that something priced at $4.99 is significantly less than something that costs $5.00.
The same principle can be applied to our everyday bank accounts.
I am guilty of feeling rich every time my pay packet gets deposited to my transaction account. I have cash to burn!!! Or at least I feel that way.
We tend to loosen up on our spending when we know our bank account has a few extra hundreds floating around in it.
This is one of the reasons it is so important to set up an automatic transfer as soon as your pay packet is received. I check my bank balance on my phone app throughout the week and when I see that my bank account has a 4 in front of it rather than a 6 my spending is reduced because I feel like I have less money.
Now there is a catch.
That money you are transferring out has to go towards your financial goals and be transferred out the day you are paid.
If for example you were saving up for a car, then I would suggest you create a high interest saving account with another bank and transfer the money there. If that other account doesn’t come with a bank card, even better. You won’t be able to access that money easily if you are wandering home after a big night and see a $20 kebab…
You won’t actually be losing this money, but trust me, you will feel as though this money has been “spent” and you will reduce your other costs before the next pay date accordingly.
The best part is once you set up the initial transfer you won’t ever have to think about it again until you reach your goal!