Everyone likes to get an improvement in their life. Some like to travel, others like to go to festivals or buy an expensive car. Unfortunately to be able to afford some extra’s we tend to have to save for a couple of months to spoil ourselves. It doesn’t have to go like this anymore.
If you want to buy something, be sure to focus all your efforts on achieving it. For example, planning to go on a 2-week vacation to the sun? Save money so you can comfortably go on the trip without having to turn every coin twice or to feel guilty for your expenditure. If you had the choice between going on vacation or getting a new phone which would you prefer? Well if the vacation is more important for you, skip on buying a new phone before yours is broken.
A budget tells us what we can’t afford, but it doesn’t keep us from buying it. – William Feather
Look at the green line on the graph and see how everyone lives their daily life. Think about what you thought you wanted to do with your money and what you used your last earned money for. Did your actual spending lay in line with what you planned? If so, congratsulations you are one of the few who can actually put their actions where they want them to be.
Besides staying true to your plans you also have the opportunity of investing your money so you can receive interest. Because of the risk you take you have a possibility of having your money work for you. In time you will see your capital grow. If you take it one step further you can use your interest and reinvest it. This allows you to obtain interest on interest, the so called holy grail of investing, the ‘compound interest’. Instead of living big on the interest you receive you return it into investments to have the potential of even larger growth.
Great things in life don’t come easy. If you want something bad enough you can hold yourself accountable for your purchases. The principle of compound interests builds on the idea that every coin you put towards investing on an early age can give a huge potential reward in the future. So instead of going for impulse purchases consider starting slowly learning about investing and starting small investments. Some day you will be able to buy anything you want.