Today I am going to talk to you about a fundamental tool to take more advantage of your money and have a reserve fund for any investment or any unforeseen event that may arise. It is the Pre-Savings tool
Why is the pre-savings important?
All this comes from a conversation a few days ago with some people about investment issues. Specifically, we were talking about taking part of the money you have and “putting” it in certain places that allow you to generate a higher return, such as a passive income.
Sometimes there are people who get what could be considered “enough money”, either through salary, rent (for example, real state) … etc and spend the entire money they get in the same month. But they spend it on things that are not extremely necessary. They get money, they spend it … and end of the month arrives and they are like at the beginning, they have to change time for money (or generate it in some other way) to start over. It’s a bit like a wheel that has no end. Is it your case?
How the pre-savings works
There is a tool that will be very useful if you are of that type of people. If when you have money in your hand you have a thousand expenses to do, a thousand things to buy or a thousand places to go … read on, because this interests you. That tool I’m talking about is a mental trick known as “pre-savings”. It’s very simple, but you have to apply it before spending (not later!).
Because there are people who save what is left over, and if they don’t have nothing left, then they do not save anything. Instead the idea is that before spending money you save a portentaje of what you earned and you keep it. Then you pretend that money does not exist, and in reality that money will be there, in the reserve.
How to start pre-saving
Maybe you can start pre-saving 10 euros in a month. 10 euros per month, in 10 months, are 100 euros. On the other hand 100 euros per month, in 10 months are 1000 euros. If you acquire the habit of pre-saving you will always have extra money for any investment you need to make. And although this month you start pre-saving 10 euros, the next month can be 20. This is because you end up getting used to only spend what you have left after pre-saving.
Maybe you can start pre-saving 10 euros in a month. 10 euros per month, in 10 months, are 100 euros. On the other hand 100 euros per month, in 10 months are 1000 euros. If you acquire the habit of pre-saving you will always have extra money for any investment you need to make. And although this month you start pre-saving 10 euros, the next month can be 20. This is because you end up getting used to your spending is what you have left after pre-saving.
As I told you at the beginning, there are people (maybe is your case) that when they earn 1000 euros, they spend 1000 euros. What happens? That these people, when an unforeseen expense arrives, go bankrupt. All its economy and its expense are based on “it enters something, they spends that something”. If you get used to spend less, there will always be a reservation. And from that reserve we can talk about investments, a fund for a hurry … and anything where you need “extra money”. And without needing to look for how to earn more money!
If you want to go deeper into these topics, I recommend a book called “The Richest Man in Babylon” by George S. Clason, a literary gem that is very enjoyable to read, where the author teaches to have more money without having to earn more, pay debts and invest with conscience.
I hope this content served you. Did you already know about the pre-savings? What is your experience? Are you going to start applying? Let me know in the comments, and share this content on your social networks so that you can also serve more people.