Ebb & Flow Corporate -

Money is the number one source of stress and arguments in relationships.

School didn’t teach us about managing money. Maybe we were lucky, and our parents taught us about saving? But often that’s not the case.

We often find it hard to talk about money. But you can get better with some simple principles.

Spending does not equal happiness

We are bombarded with advertising that tells us that spending = happiness.  But the buzz from shopping wears off quickly and we’re left with the credit card bills.

The best things in life are free. Draw up a list of the things that make you happy. Often you will find that these cost nothing. Examples might include playing sport, time with the people you love, laughter, sunshine etc

Don’t be a slave to lifestyle inflation

Lifestyle inflation is a strange thing where, as our income goes up, our spending seems to go up as if by magic.

Life starts out simple but as we get jobs, families and possessions our outgoings begin to mount. Minimalism is one answer: where you stop buying and hoarding ever more “stuff”.

Pay yourself first

There’s this idea out there that you should save whatever is left at the end of the month. But most people don’t have anything left at the end of the month.

How do you make it easier to save?

Paying yourself first means you pay yourself before you pay everyone else. When your wages hit your bank account you sweep a chunk of it to your savings account. Ideally this should be automated so you can “set it and forget it”.

The money that you pay yourself first goes as follows:

  • Repaying expensive debt (e.g. credit cards)
  • Building a cash emergency fund 
  • Investing

How much of your income should you be paying yourself first? As much as possible!

But when you’re just getting started, the amounts don’t matter. What matters is that you are getting into the habit of saving.

Invest in yourself

The money that you pay for your bills like water or gas or council tax is an expense. The less you pay, the better.

Investments on the other hand are good things. Investing in wealth generating assets such as shares, or property counts as investing. But here are some other things that look like expenses but are actually investments:

  • Books
  • Health spending (e.g. physiotherapy, gym)
  • Useful training / education

Often the most powerful thing that you can spend your money on is not more “stuff” but rather using your money to buy peace of mind.