3 - Create the Base, Set the Tone

Written By Tally sk

Whattup whattup whattup  I’m excited to bring you this post way quicker than the last, thank you to everyone who sent me feedback it was really nice to read and truly motivating, y’all real ones! I am writing these in a certain order so as you go through the series one builds off the other, and you can take the same steps I did. As always, feel free to leave a comment or share with others you think might benefit / want something else to do on the toilet XD Time to drop some knowledge…

Before you start trying to save money and start investing you must understand one key thing, why are you doing it?

It’s good to save.

It’s good to invest.

It’s good to give.

It’s (real) good to spend.

But why are you doing these things? How is it going to make your life better? You must think about why it is you want to save and invest, yes it’s just a good and responsible thing to do, but what do you actually want the money to do? There is no point of just holding onto money for the sake of it, it’s meant to be enjoyed and you are supposed to have fun in life otherwise what’s the damn point!

There’s an awesome TED talk I watched (whilst I may or may not have been at work) which blew your boy’s mind. It has my all-time favourite line about money that I try and remember when thinking about what I should be doing with money.

“Money is like water, it flows in and out of your life, you do not own it and neither does anyone else…. It is not meant to be hoarded else the water stagnates and becomes toxic, it helps things grow and flourish where it is needed”

Society has fucked up our relationship with money and the power we give it. We are fed certain messages about money and the happiness we get from it because it makes other people money. The life advertised on reality shows and Instagram force an idealised view of reality where if you consume the way they want you to then you will be happy. It’s a hard thing to detach yourself from especially when you don’t realise it’s happening to you because it’s all done over time in small ways, nudge theory style.

Part 1: Comfortable Living

I had to force myself out of the mindset that more money = more happiness before I started down this path of personal finance. Money makes you happy yes, but only to a certain point, once you are comfortable it then offers diminishing returns. So at the beginning of that first summer I decided what a comfortable life meant to me, the list of things that once I can do, I’m 100. Any more is great but this is the level that I enjoy at this point in time. See below:

  1. Be able to go eat out with my friends once a week and go for a night out

  2. Always be able to travel to see my family via the train

  3. Able to go on a short long weekend holiday once or twice a year / a big holiday somewhere abroad once a year

  4. Put money away to help secure my future self and family via investments

The benefits of being a young person with no responsibilities meant that list was very short. By taking the focus away from just trying to save as much money as possible because it’s a good idea, I set those goals above to define a standard of living that actually brought me joy. This meant that no matter what my money situation was (I.e. if I get more of it) my base standard of living remained the same. I could add to this if I got more money and add new levels but they would be nice to haves. If I can see my family, spend time with my friends, get to do a bit of travelling here and there and put money aside for future me I’m good.

Keeping that standard of simple living meant it was easy to stick to and by making it simple it became very clear what matters and what doesn’t. Your list will be different, I don’t care so much about clothes so I am happy to wear the same things or not get the latest shoes. However that might be on your list because you are passionate about fashion. Ultimately a level of realism must be applied, you can’t ball out with Gucci and LV on a 20K salary because it’s going to add up very quickly. But goals give you a focus. Just saying you want to save money is a fuzzy statement which does nothing.

  • What you want to know is what are you saving for?

  • How long do you want it to take?

With those two questions answered it becomes easier to put that money aside. Instead of putting a random amount you happen to have at the end of the month into your savings account you know exactly how much you want to put in to achieve your goal in X amount of months.

E.g. let’s say you update your wardrobe with the latest drip twice a year for summer and winter so you can look good and stay popping on Instagram. You know you usually spend about £150 each time and it’s currently June. In October you want to buy your winter clothes so to reach that £150 you know you need to save £50 a month as soon as the payslip comes through.

It’s the same concept as saving for a house deposit but way less scary sounding and more fun. By doing just that quick bit of planning, you now introduce certainty and confidence combined with next to no effort on the brain long term (boy BYE to that stress). It makes it simple and you can go on living your life knowing you always going to look fly af. These goals become your guiding lights, all your decisions can now be framed through this lens. Your buying decisions are now compared against your goals, is it worth buying that thing if it slows down your ability to reach that goal? Which can help stop impulse decisions and save you months on getting that thing you really want since you will feel worse then normal about doing the wrong thing ;)

Part 2: Mix it up

Having those goals sets a standard you can maintain. They help take away those thoughts that linger in the back of your head, “Do I have enough? Should I do this?” that comes with just endlessly spending because you know the money is there but at the end of the month you are back to zero with little to show for it again. Or worse you lie to yourself “it’s ok!” because you aren’t trying to reach something explicit like a certain number and just say you will save “some” money.

It’s helpful to have a mix of short to mid to long term goals so you are stretching your money as far as it will go. Something like:

  • Short term (within the year): Buy a PS5

  • Mid term (over a year): Buy a car

  • Long term (5+years): Buy a house

Only having one type of goal means you either are always saving for the short term and have nothing long term or you have no fun with your money because you only think about the future. It’s all about striking a balance and that is something only you can determine for yourself depending on your goals.

Finally, just like the TED talk said, money is not something to be hoarded. Once you are secure within yourself, I encourage you to than look beyond and see how you can put your money to good use for the benefit of others. I’m a big believer in paying it forward rather then back so if you liked what you read to show your appreciation why not donate to one of the following charities below (or one of your choice) currently helping with the craziness going on in parts of the world.

Charity links (feel free to add your own in the comments):

To summarise:

  • Goals help you focus in on something more tangible, not just a vague undefined thing that has no consequence if you miss it

  • Keep it simple, the simpler it is the easier it is to stick to consistently

  • Have a mix of short, mid and long term so you always put yourself in the best position - less Lil Pump and more J Cole.

If you have any questions or want to talk more 1 on 1 about any of the above contact me with the “Hit Me Up” button in the top right! Thank you for reading, I hope it helped :)

Stay safe,

Tally

Tally sk
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