Hardly Hamilton

Isn’t it amazing? You see so many bloggers, youtubers, other kinds of influencers all over the internet advocating for taking back control over your savings by spending.

‘Before you pay your bills, or anything, decide on how much money that you want to spend on yourself every single month. It’ll stop you from feeling that you’re living to work and that you’re in control of your money, that your money is for you,’ I remember reading on one of those influencer’s pages a long time ago.

What a load of rubbish. You will never achieve financial freedom with that kind of mindset.

Here are my three payday habits for a true sense of control over your money and – ultimately – financial freedom. Bear in mind that none of what you read here constitutes as financial advice. If you want an expert, then go and see an expert: I am but one man with a blog who finds talking about money and finances fascinating.

Step one: pay your bills

If you start payday by splurging on whatever it is you want, be that a state-of-the-line smart hoover* or a tablet stylus*, then you might find yourself having to go into your overdraft to pay for the essentials.

They are called essentials for a reason. As soon as you’re paid, get them paid. Now, this doesn’t have to involve paying the bills immediately; they may not be due until the middle of next month. But the important thing is that you get that money transferred or set aside to a different account, somewhere you won’t be tempted to touch it, as soon as possible.

This will be one huge weight off your shoulders. It may also be a boost to your mental wellbeing, as you won’t be worrying, what the heck am I going to do to get this thing paid?

Step two: start saving

So, your essentials have been taken care of. Nice. Well done.

But before you start spending, there’s one more thing to be done: taking care of future you. Stow away cash for a rainy day: I try and make that 10% of my earnings, across two savings accounts, every single month. I then split some more of my earnings into two ISAs, with the hope that I can use that money for a house purchase further down the line.

There are two reasons for saving:

1. It’s just good practice. Studies show that the average American cannot afford a $400 emergency. Ideally, you want to have at least half a year’s worth of savings to cover rent, a mortgage, bills or other essential expenses. Of course, this is easier said than done. If you can save even £1 every month, that is better than nothing.
2. You’re continuing to lock away money. This helps if the accounts you’re saving in have good interest rates, as your money will be working for you, but having money in different accounts for different purposes will help to prevent you from spending when you’d rather not, especially if you find it particularly hard to avoid doing so.

Step three: get spending!

You read that right: once you’ve taken care of bills and savings, you have to ask yourself: what is the point of this money? You cannot take it to the grave, it may be hit hard by inheritance tax after you’re gone, and the rate of inflation versus current interest rates means that it is actually losing value by sitting in a typical current account.

So, with steps one and two ticked off, you’ll have reached the financial freedom of step three, since you will be completely free to spend your money however you want. There will be nothing else you need to save for and no other essentials to get paid. Why shouldn’t you spend money on a shopping spree if you can afford it? Tell me one good reason why you shouldn’t. I dare you.

Treat yourself, you’ve earned it.

What are the steps that you’re take towards gaining financial freedom? I’ve got some more tips for you right over here 👉🏼(click me!)

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