Wants and needs
In today’s consumer driven society it is more important than ever to not succumb to the many marketing messages you are bombarded with each day urging and persuading you to buy the latest gizmo or toy that in your heart of hearts you know you do not really want nor need.
Why is this so important today? Because put simply human beings have unlimited wants and limited needs! The trouble is that the advertisers know this and continually prey on people’s weaknesses. However if you truly want to win the game of wealth mastery you have to learn to control your wants and focus on your needs. This is the true path to becoming wealthy and living the life of your dreams.
So how do you do this? Well it’s not that difficult if you know how. The best way to start is to work out your cost of living either on a spreadsheet or by using a personal finance app such as Moneyhub or Money Dashboard. Break down your monthly and annual expenditure into basic needs, to cover your necessary cost of living expenses, and your discretionary expenditure, to cover entertainment, holidays, short breaks etc.
Then create a number of separate bank accounts with headings such as Necessity Account, Play Account, Financial Freedom Account, Education Account, LongTerm Saving For Spending Account, Give Account. You then pay your monthly income into each of these accounts by standing order. You only spend it on the things the accounts are designated for. That way you can budget effectively and ensure you do not get distracted into spending spare money on impulse purchases that you don’t really need. You can plan your finances with confidence. This is known as the Jars System which is featured in the book Secrets Of The Millionaire Mind by T. Harv Eker.
It takes self-discipline and a deferred gratification strategy meaning that you put spare money aside regularly and only spend it when you personally need to spend it. That way you control money rather than letting money control you!
I commend the system to you. You know it makes sense.