Wednesday, December 30, 2015

2016 Intentions | How to have $10,000 cash, money in the bank!

I like to watch reality competition shows.  Every so often, the contestants will be tasked with an interesting and unique challenge.  The game show announcer declares that the winner will receive $10,000 in cash!

Screams are heard from the hopeful contestants as they are filled with emotion at the possibility of earning $10,000.  Some jump up and down, others have tears in their eyes as they describe how their lives would change if they were to receive such a blessing.

I watch what unfolds with mixed feelings.

On one hand, I too would be excited if I received $10,000 for less than an hour of activity.  But, on the other hand, I never want to be in a situation where the only way to receive such an amount of money would be to win on a gameshow.  Yes, $10,000 is a lot of money, but at the same time... it isn't.

Years ago, I set the intension of saving $10,000 cash.  I picked that number because $10,000 was (and still is) a lot of money.  I wanted direct access to $10,000.  I never wanted to be in a situation where I never had five figures in the bank unless I won it on a gameshow.  I needed $10,000 to be normal and accessible.  T Harv Ekar talks about the financial thermostat in his book Secrets of a Millionaire Mind.  This is our self imposed financial comfort level.  The people who started crying at the thought of having $10,000 likely never had that amount of money.  But, on the other end of the financial spectrum are those who've made millions, lost it, and made it back again.  Once you reach a certain financial level, it becomes easy to replicate.

 My wish for every single person reading this post is that you have the opportunity to have at least $10,000 in your bank account.  Whenever an emergency situation comes up, you'll be ready.  If your family members need help, you can assist.  If you lose your job, you can continue to pay your bills. If an opportunity to invest comes your way, you can take advantage!  And if you were to lose the $10,000, you'd know how to get back to that level again.  Wouldn't you want that?

Good!  Let's talk about how to do it.

1. Create a system
When I first made the decision to become a deca-thousandaire, I went back to the basics.  The book that taught me was Automatic Millionaire.  I don't think I even finished reading the book before I set up automatic wealth deductions from my paycheck to my savings.   Saving automatically changed my life!   Reaching my goal was way easier than if I had to use discipline to get to the same outcome.

We receive 26 paychecks a year.  If we saved only $200 per paycheck, we'd easily have $10,000 in two years.

 "But Nadege.....two years is a long time."

Really?  If you would have started saving $200 a paycheck when North West was born. You'd have $10,000 by now.  That's how fast time goes by.   Even if you don't have and extra $200 to save each paycheck, start with $100 or $150.  As the years go by, you'll get raises and can increase your automatic deductions.  The point is to do it!   If you do nothing else in 2016.  Set an automatic deduction to a savings account and let it work for you.
2. Measure your results
The day I decided to save five figures, I opened up excel and created a spread sheet.  Each month I'd update my net worth tracker by listing my debts and the amount saved.  My favorite thing to do at the end of the month was to look at my numbers.  Chills went up my spine as I watched my net worth rise.  With every thousand dollars saved, I become even more excited about the day when my bank account would reach the magic number.  It was an obsession.

3. Enjoy saving. Hate Debt!
Let's face it, saving multiple thousands of dollars is easier when you don't have a ton of debt.  First and foremost you need to have a reduction plan in place.  At one point I had a car payment that needed addressing. So once I had a small amount saved, I threw all of my money at the stupid car payment until it was out of my life.  Every spare dime I had I allocated towards reducing the loan and I kept a log of how much interest saved as motivation to keep going.  

Debt causes your money to leak. Perhaps you could have saved those $10,000 multiple times over if you hadn't been paying on so many credit cards.   Debt is the enemy of your wealth and you must treat it as such.  You can't get comfortable with it. You can't have it lingering around.  It must be dealt with using a high level of urgency.   For help on how to attack your debt, I suggest Dave Ramsey's Total Money Makeover.

4. Stop thinking $10,000 is a lot of money. 
 One of the most powerful ways to manifest something in your life is to stop seeing yourself as separate from it.  When you're thinking "$10,000 is a lot of money" you might be falling into  the trap of viewing it as something that's unattainable.  Yes, $10,000 is a decent sum of money, but you've got to start getting comfortable with the idea of having a surplus of $10,000 cash.  It's a new mindset.

When I first began my financial transformation, the first thing I did was to stop flinching every time I saw a price tag of something that seemed expensive.  That doesn't mean I bought the item, it just meant that I couldn't overreact to the cost. This took a lot of work, because I was the cheapest person you know.  But once I stopped gasping for air every time I saw a $100 price tag, my mind and life began to shift.

You have to get comfortable with the notion of having that much money. If you don't, you'll do everything in your power, consciously and subconsciously, to keep yourself at your current financial level.

5.  Get to a milestone then replicate.
To save $10,000 in cash, all you have to do is create a system to save $1,000 in cash. Then replicate.  It's that simple.  If you can save $1,000, you can get to $10,000. It might take a little longer, but it's possible and it's worth it. Sure, thinks will pop up along the way which will cause you to dip into your savings.  But, you'll pay it quickly, then get right back on track towards your $10,000.  One thing I made sure to do was not get upset when a situation came up that required dipping into my savings, instead, I was grateful to have the money available.

 Having a cushion of $10,000 makes you feel so amazing.  You can walk into a store and get what you want. But chances are, you'll be wiser with your money because you'll want to maintain that $10,000 threshold.  When you've worked hard to build your savings, you won't be so quick to blow it.   I suspect the game show winners often spend their earnings as quickly as it comes in.

Why, because when you get a lump sum of money, the next thought that appears is: "how am I gonna spend it?"  But when you build up $10,000, the next thought is "how can I get this to $20,000....

And that's when the fun begins.

  1. This post is right on time for me. I am doing the 52-week challenge that is popular on Facebook and Pinterest to save money but I may have to start incorporating automatic drafts of a certain amount to reach my savings goals.

  2. great post as we enter the new year!i'm definitely taking this idea with me into 2016 after all my debts are cleared.

  3. Great Post!!! Seeing everyone that I'm close to barely existing paycheck to paycheck with little to no savings is my warning that I don't want the same for myself.

  4. This is a great post. I've been wanting to save for a down payment for a house forever but the task always seemed unrealistic to me rig my salary. I always say I wait until I get a better job. In the meantime all these great deals are passing by me. I've been using his app called digit to help me save. Have you tried it?

  5. Interesting, I've replicated this exact amount several times. I think it's a safe amount, will try to double it this year by creating sources of income outside of my day job.
    Could you share some spreadsheet ideas/tips?

  6. I've always loved your blog. It was my first blog I read when I began my hair journey, in fact I stopped reading you for awhile because you kept my Amazon cart full and my pockets empty!
    You have truly spoken to me as it's been my goal to have $10k in the bank LAST year! Now I have no reason not to achieve that goal so I'm setting my savings up to be automatic. Great minds think alike, but sometimes we need a shove in the right direction, and this was a big push for me!