On first glance, how you spend your money and how you eat seem completely different things. But, if you look at it a different way, your Spending Habits are very much like your Eating Habits.
Here’s what I mean.
Each little cake that you eat won’t show any effect at all, so many people have a little treat now and then, or maybe they have numerous treats, each and every day.
But it is not the individual treat that is important; it is the cumulative effect of all the treats added together over months, years and decades that truly counts.
And that is compounding.
So too with your finances. People that have healthy finances know that it is simply a set of habits and beliefs that, done consistently over time, will lead to amazing results.
Each time you spend, you move a micro-meter away from your ultimate goals. Each time you save, you move a micro-meter towards your ultimate goals. Each moment builds and builds, until you eventually see the full effects of your habits. And that is in the form of your net worth. Your net worth is a number that cannot be argued with. It is therefore an extremely useful metric to be able to track the effectiveness of your money habits.
So, it is useful for you to set a target on your overall net worth.
And, once you have the number you are working towards, why make it serious? Turn it into a game – everybody loves games (and they hate saving). So, if you think of each save as, say, saving a goal from your football opponent, you can do a little victory dance and celebrate on behalf of your future self!
So – what are your financial habits? Are they healthy ones or unhealthy ones? More importantly, will your future self thank you, and live a financially stress-free life, or will it be thinking about how your younger self kept spending money and frittering it all away….?
Heather is a holistic financial wellbeing coach. Her aim is to educate women entrepreneurs around money and finances, so that they take back their power.