Out of sight, out of mind.
When I was in my late 20s I would go all the way to the only available ATM (Baybank it was called) and get $50 out. You may not believe this, but it didn’t last that long, even in the 80’s.
So, my solution was to get $100. Brilliant right? But… Then $150, $200... The problem was that each time, the money lasted the same amount of time. How could this be? It’s 4 times the amount. Where was it all going?!
I learned quickly that the amount of money I had in my pocket ruled my spending habits. If it was there, I’d spend it. I tried to limit myself to much less, but it simply made me miserable.
Instead I found a middle ground- some cash in my wallet for gas, some aside for bills, some for savings and the rest in my pocket for spending.
What I had implemented was an early form of a cash management system.
When I came up with a reasonable number to put aside, and a reasonable number for spending, I found I could consciously make that money last until my next planned trip to the tiny green building. It made me feel infinitely better about my spending choices.
Technology for cash management has advanced a long way from those days, and now it is possible to create a much more sophisticated cash flow system- even one that practically runs itself.
Yes, it does start with a budget. But don’t run away scared just yet.
I know budgets can be like diets- hard to keep up with over time. However, they are easy to start. If you get off on the right foot and set up a proper cash flow system only a little maintenance will be required to keep it up.
The benefit? No more wondering if you spent the right amount on dinner out or on clothes. Knowing that there is money set aside in your cash flow plan for your bills and savings allows you more freedom with your spending money and less guilt or confusion.
Interested in how to structure this? Here’s my article on setting up your accounts to get a stronger grasp on your cash flow.
Presented by Dan Romaine. The accompanying pages have been developed by an independent third party. Commonwealth Financial Network is not responsible for their content and does not guarantee their accuracy or completeness, and they should not be relied upon as such. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. Commonwealth does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. Securities offered through Commonwealth Financial Network, Member FINRA/SIPC.
This communication is strictly intended for individuals residing in the state(s) of CT, MA, NH and PA. No offers may be made or accepted from any resident outside the specific states referenced.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019.