When it comes to money, some people like to complain “woe is me,” but the reality is you’ll never be financially free unless you make a plan to do it.
In her new book Think and Grow Rich for Women, Sharon Lechter cites a study that shows how much women fear being poor. In fact, even women earning over $200,000 a year still have a deep-rooted concern of falling into the clutches of poverty. People’s spending behavior generally falls into two categories: either they put life on hold to take care of responsibilities never paying themselves first, or spend like there’s an ongoing fire sale and justifying it with statements like, “I work hard so I deserve it.”
Neither of these two extremes will sustain your personal or financial well-being. We found a better method that will help achieve your goals and take care of financial commitments simultaneously – it’s called Soul Savings.
Here’s how it works: A Soul Savings is a reserve fund that creates financial liberation. This is separate from a regular checking account that you pay monthly bills from or an emergency savings that should include six months of living expenses. This account provides the decision making flexibility to do whatever it is you dream of, really. Get started in just 5 steps:
Set up a separate account: I recommend opening an account that is separate from your regular household or business transactions. Personally, I use a completely different bank. This eliminates the chance of making a transfer, moving money around putting off the trips and activities that you’re planning for.
Make your Liberation List: The entire point of your Soul Savings is to become financially empowered. What is it that you want in your life? Perhaps you want to work from anywhere in the world, not feel tight about going out to dinner or generate enough income to feel more free and time flexible. Make the list. Include the specific activity and the timeframe you’re committed to achieve it by.
Leverage the 50/30/20 Formula: This is a handy household budget formula. Half of your take home income should go towards essentials. These are the things that you earn a living for – a place to live, food, utilities and transportation. Take 30 percent of your budget for lifestyle expenses like eating out, getting your hair done and cable (that’s right, TV is not an essential!). Depending on your goals, part of the 30 percent can be used for your Soul Savings with the rest coming from the final 20 percent, which is earmarked to plan for the future – emergency fund, retirement, and debt repayment. Financial planning is important. While delayed gratification is good, you shouldn’t have to wait until you’re old or dead to start living.
Create additional income: The money is always there. You just have to find it. Cutting back is one way to having more money, but so is generating income.
A few ideas to get you started: Convert your guest bedroom to a mini bed and breakfast for overnight guests with AirBnB. Brainstorm an additional service or product that you can offer your existing customers to increase your monthly gains. Use SurveyMonkey to get feedback and find out what their most urgent pains are and start preparing your new offerings.
Fend off the naysayers: Friends and family may think you’re a little weird for letting a stranger stay in your home, but stay focused on your goal. Dave Ramsey, the financial expert on getting out of debt, says that to build wealth, “you have to live like no one else, so you can live like no one else.” His book, Total Money Makeover, provides a step-by-step plan for how to do it.
Not everyone is willing to stretch beyond their comfort zone and that’s why not everyone will achieve financial liberation. Align with people that have the same beliefs by joining an accountability group like Soul Circle where you can find others building a Soul Savings.
Get Started: Take the first step by downloading the Personal Budget Planner to develop and fund your liberation list. Once you have it all mapped out, take it online. These are a few of our favorite tools for managing a Soul Savings plan on-the-go:
The story that you’re telling yourself – “My financial dreams will never be a reality” – is not true. Soul Savings is a part of the roadmap that will help get you there.
I’m going to travel the world. How about you?
What are the top 3 things you would use your Soul Savings for?