Budgeting is dead. Long live the budget!

Ah budgeting. That most painful rite of passage into adulthood. Right up there with tooth extraction and taxes. Who among us hasn’t tried and failed to keep a budget? It is like dieting, only a lot more boring.

The problem with traditional budgeting is that it is both cumbersome, and ineffective.

Here is how it usually goes. We pore over our accounts to make a list of all our expenses (or maybe use an app). We gasp as how much we’ve spent on frivolous things (that red shirt we’ve only worn once). We slash our budget mercilessly, and vow to follow it religiously. And for a week, or maybe two, we’re very conscious of each rupee. But that quickly grows tiring. Moreover, when the temptation to spend arises (that blue bag!), we simply can’t resist the spend.

So, is budgeting futile? Not if you use it right.

The traditional way of budgeting is focused on tracking our money and trying to resist spending. In our view, the right way to use a budget is to plan your saving and spending, rather than ongoing spend tracking. Without knowing how much you can realistically save, it is hard to save well. That’s where a budget really helps. Take 30 minutes to build what Ramit Sethi, the author of “I will teach you to be rich”, calls a “conscious spending plan”. It is simple (albeit a bit time consuming). But grab some coffee, a notebook (or excel), and get your finances in order.

Here is how you do it.

Step 1: Start with listing out your monthly essential expenses. This includes things like rent, utility bills etc.

Step 2: Then, add the non-monthly essentials. This includes things like doctor’s appointments, life insurance premiums etc. Convert these into a monthly figure so you know how much to set aside each month for them. One easy way to do this is calculate how much you need to spend on them per year, and then divide that number by 12.

Step 3: Figure out how much you need to save for the future. As we discuss in detail in another article, you can either set savings goals (e.g., a vacation, retirement etc.), or simply pick a target amount you’re comfortable with.

Step 4: Add the figures from step (1), (2) and (3). Subtract these from your monthly take-home income. This is your fun “spend”. You can spend it on whatever you like!

Bonus step: Make sure the number from Step 4 is practical. List out the “fun spend” you value (e.g. going out, shopping). Now compare that number to the figure you obtained in Step 4. Play around with these numbers until you’re comfortable with your spending and saving.

Now, what you need to do each month, is save the figures in Steps (2) and (3).

As you know from our previous posts, an effective way to do this, is to simply transfer this money each month to a separate account. It is best if you do this right when your salary comes in.

That’s it. You’re done. You can now spend the remaining money “guilt-free”.

We recognize that this is a lot of math to do. At Easyplan, we’re trying to make this planning easier. Sign up for our goal-based saving app at www.easyplan.in.

Saving for your dream vacation

So now we know the theory. Save for goals, get an emergency fund in place, and start saving early (even it means starting small).

Now, let’s talk about how to put these principles in practice. What steps do you take to save for a goal? A common aspiration among us so-called “millennials” is to travel the world. We want to save up for a great vacation and head out from the city bustle. What do we do to make this happen? We break it down below.

Set a realistic target

The first step is to figure out how much you can realistically afford to spend on this vacation. For example, if you have already saved Rs. 15,000, and can realistically save about Rs. 3000 per month, then in 5 months you can afford a trip costing Rs. 30,000. Commit to saving too much, and you are likely to miss your savings target and be disappointed.

Take the time to scope out deals

The best travelers I know plan months in advance. They spend a lot of time researching ways to optimize their spending. Here are some strategies our team came up with!

  • Optimize transportation costs: Most travel websites allow you to set up price alerts. Kayak.com actually let you see where you can go within a certain budget. Skyscanner meanwhile has an option to see flight costs from your city to anywhere in the world!
  • Book in advance, and be flexible on your dates: Even moving dates by one or two days can have a massive impact on cost! If you have the luxury of time, look at slower but cheaper modes of transport.
  • Avoid peak seasons: For example, the monsoon is a gorgeous but underrated time to visit large parts of India. Autumn and Spring are great times to visit other countries to avoid the summer and Christmas/New Year rush.
  • Look up local deals: Scour the internet for local deals on the things you love. For example, lunch menus at high-end restaurants tend to be less expensive than dinner menus. Museums have free entry at certain times and days. Check in advance whether your destination city offers discount cards to tourists. Ask your hotel/hostel staff about which markets are pocket friendly and where should you expect to haggle. Keep an eye out for these deals, and you’ll notice that money will leave your pockets slower than you might have anticipated.
  • Be flexible in your expectations

    We often get swayed by what we see and hear in the media. For example, when someone says white sand beaches, we often picture the Caribbean, Zanzibar, or Mauritius. However, there are great beaches and water activities in destinations closer to home, like the Konkan coast, Andamans or Lakshadweep. These are easier to access and cheaper to visit. Think about what you really want to do and look for best place to do that.

    Then, to reduce your budget, see if you cut down on less important expenses (e.g., stay in a hostel vs. a hotel). The happiest people spend on the things that they love, not those that others love.

    Save that money in a separate savings account

    Once you’ve figured out your monthly savings target, start putting that money away in a separate account. Why a separate account? Because research shows that you are far less likely to spend money labeled “savings”. Even if that label is a purely mental one. Look for high-interest savings accounts. Many banks now allow you to open these online as well.

    Set up a regular transfer to that account

    Now right after your salary comes in, transfer your savings target from your salary account to this new savings account. Make it even easier for yourself by making that transfer automatic. That is a great way to overcome the self-control problems that will invariably crop up. You can set up an automatic regular transfer from your Netbanking, or (shameless plug), you can sign up for the Easyplan app.

    We hope these tips help you save up for that dream vacation! Send us a note to tell us where you went!

    The magic of compounding

    For the last few months, we’ve been conducting financial health seminars at companies in the Mumbai area. We hear a lot of users say – I don’t earn enough to save. What difference will saving Rs. 500 or Rs. 1000 a month make? It’s too little.

    We can all relate to this sentiment. But it can limit us from realizing our savings potential. In this article, we will explore how starting early, even if it is a small amount, makes quite a difference to your savings success. This is because of a magical phenomenon called compounding.

    Most of us have come across compounding in school. If you’ve repressed that traumatic memory, here is a quick reminder. The money you save or invest (called the “principal”) earns interest. That interest also earns interest in the future. This adds up over time to generate substantial gains.

    Let’s do a fun exercise. Try your hand at the quiz question below.

    Rs. 1 earning 6% compound interest for 50 years will become:
    Rs. 50
    Rs. 500
    Rs. 3800

    The answer is Rs. 3800. Over 50 years, Rs. 1 increases by 3,80,000%! This is probably why Einstein called compounding the eighth wonder of the world.

    Let’s take a more real world example. One of our users is 23 years old. They said to us: “I can save only 500 rupees every month, but that seems so small”.

    Saving Rs. 500 each month at 6% rate of interest would leave them with Rs. 34,885 in 5 years. That seems like a large sum for a few missed coffees every month, right? Saving does not mean that you need to miss out on the things you like – just make sure you are saving something, even small, that you are comfortable with.

    To understand why time has this outsize impact, we need to look at the formula for compound interest.

    A = P (1+i)^t

    Where
    A = The final value
    P = The principal, or initial saved amount
    i = Rate of interest/return
    t = time periods

    You can see from the formula that the final value of the investment grows linearly with the principal sum. If the principal doubles, the final investment value also doubles. But the final value of the investment grows exponentially with time. At a 6% rate of interest, doubling the time period from 5 to 10 years, more than doubles the final investment amount. To 2.35 times the principal amount to be precise.

    This is why we have a cardinal saying at Easyplan – Start early, even if you start small.

    Of course, there is another important factor which is the rate of return or interest. That also makes a significant difference. However, that higher rate of return is also associated with risk. We will cover how to navigate the risk-return trade-off in future posts.

    The 3 savings goals everyone should have

    Last time we talked about why goals are the starting point for managing your finances. Some of our users don’t have goals in mind. This is especially true for young people who have just started their first jobs. For them, we suggest these three essential goals.

    Build an emergency fund

    The one thing financial planning experts agree on, is the importance of having some savings set aside for emergencies. What do we mean by emergencies? Basically, any large unanticipated expense such as job loss, illness, or home repairs. When we bring this up with users, we face a lot of resistance. It seems like a singularly uninspiring goal.

    However, the same customers will then tell us about the times that emergencies prevented them from purchasing their dream home, or moving their child to a better school. Having an emergency fund is essential to ensuring you stay on track for the other, more glamorous goals.

    How much should you save in this fund? Experts generally recommend three to six months of expenses. You can keep that in a saving account that is different from your main spending account. Why a separate account? It makes it far less likely that you will spend your savings.

    Pay down loans, especially credit card debt

    Credit cards have many benefits. They help you build a credit history. They can help you track your spending better. They have good rewards programs.

    However, they come with hefty interest charges. We estimate that the average annual interest rate on credit cards in India is about 35%. In comparison, the top-performing mutual fund in India only gave 21% annual returns over the past three years.[1] It would be exceedingly rare for an investment to beat credit card interest rates. And more importantly, a mind free from the stress of loans, is a mind that can plan better for the future.

    Start saving for the future

    I know it seems silly to save for retirement. It is 45 years away! But investing early is the key to building long-term wealth. Let me make this concrete. Suppose you needed Rs. 1 Cr. for retirement at 65. If you started saving a fixed amount each month at 25, you would only need to save ~Rs. 8200 each month.[2] If you started at 35, that number would be ~Rs. 15,000. At 45, that would have ballooned to ~Rs. 1.2 lakh!

    The above three steps are essential for maintaining a good financial standing in the long run. We hope you make use of them and start treading your path towards a successful financial journey.

    [1] The L&T Emerging Businesses Fund. Souce: Value Research. Accessed at this link on 30th July 2018.

    [2] Assuming long run equity mutual fund returns of about 13% per year.

    Why identifying your goals is the key to saving successfully

    Last week we talked about the most important principles to keep in mind while saving money in your twenties. The first thing we recommended you do, was to identify your savings goals.

    For many people, setting goals seems like a logical way to approach saving. But we also meet customers who say, “Can’t you just tell me how much to save?”. Or “I don’t have any goals”. In this article we will tell you why goals are the foundation of our financial planning approach. And which ones you can start with if you don’t have any goals on your mind currently.

    People who save for goals, save more.

    Studies have shown that people who save for goals, save more than those who just save generally (about 15% more, according to this study from Morningstar). This is due to a behavioral phenomenon called mental accounting, which we discussed at length in a previous post.

    Here is the long and short of it. People commonly think of their wealth or income in “categories” or “envelopes”. It is a simple way to keep track of their money. For example, you may divide your income into rent, eating out, savings etc. Research shows that people hesitate to move money between these envelopes. Goal-based saving turns this bias into a strength. Simply put, saving money for a specific goal makes it less likely that you will spend it for something else.

    Goals tell you how much you need to save, so you can spend the rest guilt-free.

    In our conversations with users, we hear a familiar story. People say they are happy that they are saving. But they worry if they are saving enough. Well, how much is really enough? This is a question goal-planning can help answer. By setting goals, and specifying when you want to achieve them, you can calculate how much you need to be saving for them. Once you’ve saved for the future, you can stop worrying about money, and enjoy the remainder of your income guilt-free.

    Goals also help determine where you should save and invest.

    The single most important factor determining where you should place your savings (e.g. fixed deposits, mutual funds), is when you to need the money. We will cover this in more detail in the future, but here is the main point. In the long run, equity mutual funds tend to outperform almost every other financial product, especially fixed deposits and saving banks accounts. But in the short-run, their performance can fluctuate quite a bit. We don’t recommend investing in them if you need your money back in the next few years. But how do you know when you need the money? The answer (you guessed it!) is: your goals will tell you.

    Three goals everyone should have: an emergency fund, loan repayment and long-term investment.

    We understand that many people, especially young people, don’t always have goals in mind. For them, we recommend they start with the essentials: paying down debt (especially credit card debt!), and building an emergency fund. Saving up for retirement or long-term wealth building is another great goal to start early on. These are extremely essential to have. Think of them as the vaccines you got as a child – slightly painful (and boring), but very useful in protecting you in the long run. More on this in the next post.

    So, we hope we have convinced you to start your financial planning journey by identifying your goals. If you remain a skeptic, don’t let that stop you from saving. As we discuss in this article, just set yourself a savings target and get started.

    READING

    Egan, D. (2017, May 24). 9 Reasons Goal-based Investing Leads to Success. Retrieved from the Betterment blog: https://www.betterment.com/resources/investment-strategy/behavioral-finance-investing-strategy/goal-based-investing/

    Hammond, S. R. (2017, April 10). Goals-Based Investing: From Theory to Practice. Retrieved from Forbes: https://www.forbes.com/sites/pensionresearchcouncil/2017/04/10/goals-based-investing-from-theory-to-practice/#31011b88459d

    Morningstar. (2015). Optimizing Savings with a Goals-based Approach. Retrieved from Morningstar: http://www.morningstar.in/posts/43045/goals.aspx

    Samlad, R. (2017, September 22). The importance of goal-based investing. Retrieved from Morningstar: http://www.morningstar.in/posts/43045/goals.aspx

    Shefrin, H. M., & Thaler, R. H. (1988). The behavioral life cycle hypothesis. Economic Inquiry, 26, 609-643.

    Rha, J.-Y., Montalto, C. P., & Hanna, S. D. (2006). The Effect of Self-Control Mechanisms on Household Saving Behavior. Journal of Financial Counseling and Planning.

    Shefrin, H. M., & Thaler, R. H. (1992). Mental accounting, saving, and self-control. In G. Loewenstein & J. Elster (Eds.), Choice over time (pp. 287-330). Russell Sage Foundation.

    Thaler, R. H. (1990). Anomalies: Saving, Fungibility, and Mental Accounts. Journal of Economic Perspectives.

    Saving money in your twenties

    Guest column by our summer intern, Vishal Aditya Potluri.

    Your twenties, more than any other decade, are a time of self-discovery. It is the first time that many of us are living independently. We are working hard to build fulfilling careers. We are forging friendships that we hope will last a lifetime.

    In all of this, saving and financial management can come as a rude interruption. Young people often ask us whether they should even be worrying about saving as a 20-something. After all, won’t their investments in their education and careers pay off? Can’t the future millionaire that we’re all sure to be, make up for the time lost? Yes, we all hope for a much brighter future. But doing some basic financial planning early on, can go a long way.

    Here are some simple steps you can take in your 20s to be financially smart.

    1. Plan for your goals

    How much you need to save depends on your goals. In modern India, people’s goals and circumstances can vary a lot. Some people want to buy a home. Others are comfortable renting. Some of us want to start a family. Others are planning for further studies. Identifying your goals can help you plan in advance for them. List out the specific goals that you want to achieve and estimate how much they cost. Divide this number by the number of months you want to achieve them in. This will give you an amount that you need to save each month. Sum these up across your goals. Now make sure you save this amount regularly (use EasyPlan to simplify the process). If your goals or your income change, you can redo this exercise to calibrate this amount.

    2. An absolute requirement: Save for Emergencies

    Phone damage. Job loss. Health issues. Emergencies can crop up unexpectedly, and it is important you save for them. Personal finance experts recommend keeping 3-6 months of living expenses aside. Keep this easily accessible, like in a savings account. You will thank yourself for your foresight should things go badly. If all goes well, it will be still be a welcome gift for your future self.

    3. Start small, but start early for long-term goals

    When it comes to financial decisions, most people are serial procrastinators. And when you’re young, it is easy to tell yourself “I’m only 20 something, I can start thinking about saving in a few years”. But those few years make a significant difference. Especially for large goals. Buying a house or a car can be onerous if you don’t plan in advance.

    Let’s take an example (represented in the above graph). Suppose you started saving Rs. 1000 each month in a simple savings account (at 6% interest). If you started at 25, by 45 you would have Rs. 4.7 lakhs! If you started at 30, you would have only Rs. 2.9 lakhs. If you started at 35, you would have just Rs.1.7 lakhs.

    This is because the interest is compounded. The interest or return you earn, earns more return in the next period. You don’t need to remember the mathematical formula. What you need to remember is start small, but start early.

    4. Don’t be afraid to invest in yourself and your career

    Of course, many people aren’t able to save as much in their 20s because they are studying or investing in other ways in their career. That’s totally fine. Think of this as a different sort of investment, that will increase your earning potential for years to come.

    So in conclusion, in your 20s we suggest that you save for emergencies, and for your upcoming goals. Remember to start early, even if small, for long-term goals. And don’t beat yourself up if you’re investing in your career growth in other ways.

    How much should you be saving?

    For the past few months, we’ve been conducting financial planning seminars at companies in Mumbai. It gives us a chance to get to know our users. One of the most common questions we get asked is, “how much should I be saving?”. This is not an easy question to answer, even for trained economists. But let’s not let perfect be the enemy of good. Below, we introduce three ways to go about setting a saving target. Select the one that works for you.

    The longer but more accurate way: Identify your goals

    What is “enough” savings really depends on your personal living situation. In modern India, people’s requirements can vary. Some want to buy a home. It is very important to them psychologically. Others live at home, or are comfortable renting. For some, owning their own vehicle is an essential goal. Others are comfortable taking public transport. 1 Of course, there are some goals everyone must plan for. Paying down debt. Saving money for emergencies. Building long-term or retirement savings.

    For most of these goals, calculating how much you need to save is simple math. For example, if you want to buy that new iPhone 2 in 10 months. Others like your home down payment, retirement etc. are harder to plan for. Fortunately, there are many online calculators that help with that. We ourselves have built a few into our product.

    But all this sounds like a lot of work. At EasyPlan, we’ve tried hard to make it easier. But if even the thought of doing this exercise scares you, there is an easy alternative.

    The quicker way: Follow rules of thumb

    When we tell users the “correct” method above, they often ask us – great, that makes sense, but can you just tell me what percentage of my income I should be saving. Behavioral economists call this a “heuristic” or “rule of thumb”. They are much easier for us to remember and follow.

    Now, authoritative research in India on this is quite limited. And as we discussed above, it is complicated by the fact that each person’s financial context varies. but experts suggest that 20 – 30% makes sense for the average youth. This article suggests a neat heuristic – save your age. However, most articles only consider long-term or retirement saving, so you should add to this number for other goals to be safe. As Thaler and Sunstein say in their seminal book “Nudge”, “It is clear that the cost of saving less outweigh the costs of saving too much.” 3

    If you’re like many young people, struggling to get by in your first salary, these percentages can sound very intimidating. We ask you then to remember the third, but by far the most important rule of saving. Get started.

    The most important rule of saving

    With personal finance, many people let perfect be the enemy of good. They think they can’t do anything because they don’t earn enough, they have so many expenses, they are not an “expert”. The list of excuses is endless. So years pass by, and they do nothing.

    Don’t be that person. Pick a monthly savings target. Don’t worry about how big that number is, pick something that sounds doable. Then, commit to increasing that number every month by a teeny tiny bit. 4 Again, don’t worry about how large that increase is. The important thing is that you’ve started saving.

    So to recap, here are three ways to figure out how much you should be saving. If you have 15 minutes, lay out your goals. If you only have a minute, pick a rule of thumb, or just set a number that seems achievable for you. Bottom line is – don’t bury your head in the sand. Just get started.

    The science behind saving

    Our last blog talked about the simplest way to start saving: set up a regular automatic transfer from your salary account into a separate saving account. “Save before you spend”, we called it. We didn’t make that up. There are well-studied psychological principles that make this simple technique so effective. That’s what this blog is about. If you’re interested in how we think about money, keep reading.

    The power of mental accounting

    Our first recommendation was to have two bank accounts. The first account is your salary account, which functions as your spending account. The second account becomes your savings account. Why bother with two accounts? Research shows that you are far less likely to spend money labeled “savings”. Even if that label is a purely mental one. Behavioral economists call this phenomenon mental accounting.

    Here is what that means. People intuitively think about their money in buckets. It is a simple way to keep track of, and control their expenditure. You may yourself have budgets for different spend categories – transport, going out etc. What is crucial from a savings perspective is that people treat money in different buckets differently. Cash is most likely to be spent. Money in savings accounts is less likely to be spent. The least like to be spent is money earmarked for savings goals like children’s education or retirement. That’s why the simple act of labeling one account as “savings”, makes it less likely that you will spend it.

    The evil twins: temptation and inertia

    Our second recommendation was to regularly, and automatically transfer your savings from your salary account to your saving account. Two nuances here. First, it is best if this transfer is on the on same day or a few days after you receive your salary. Two, it works better if this transfer is automatic. There are two behavioral issues at play here.

    The first is the self-control problem. Even the most organized and well-intentioned of us struggle to control our spending. We build detailed budgets and vow to stick to them. But when the opportunity presents itself, we are unable to resist the temptation to spend. Behavioral experts describe this as if our brain’s decision-making functions are divided into two systems.

    They call the first the “Reflective system” or the “Planner”. It is the rational and analytical part that is able to weigh the pros and cons of any decision. The other, which they call the “Doer”, is the emotional, impulsive, intuitive part. When temptation arises, the “Doer” part of our brain often trumps the “Planner”, and our best plans get waylaid (all puns intended). That’s what prevents us from sticking to our diets. When we see those pakoras on a rainy afternoon, it is too much for even the most disciplined to resist. The same goes for spending.

    The second is inertia, or what behavioral economists call the “status quo” bias. Basically, people are lazy and they tend to keep doing that they are doing already. That’s the reason why we wait years before cancelling those pesky email subscriptions. Or keep putting off connecting our Aadhaar to our telephone number. Making saving automatic ensures you don’t fall prey to this inertia. And on the flip side, it also ensures you won’t miss spending the money. You will simply adjust your spending pattern. Biases can be a double-edged sword!

    Anyway, the point of this article is not just to show you that we’re a well-read team. It is also to show you why the simple act of setting up automatic savings transfers into a separate account is so powerful. It is fueled by basic human intuition and psychology.

    READING

    Maton, Cicily. (2018). How to Harness Mental Accounting to Instill Good Financial Habits. Interview by Jacob Meade, Wall Street Jornal.

    Nelson, E. (2018, May 01). All the human flaws and biases that prevent you from managing money better.

    Samuelson, W. & Zeckhauser, R (1988). Status Quo Bias in Decision Making. Journal of Risk and Uncertainty, Vol. 1(1), Pages 7-59

    Thaler, Richard H. (1990). “Anomalies: Saving, Fungibility, and Mental Accounts.” Journal of Economic Perspectives, 4 (1) (193-205)

    Thaler, R. H. & Shefrin, H. M. (1981). An Economic Theory of Self-Control. Journal of Political Economy, University of Chicago Press. Vol. 89(2), Pages 392-406

    Thaler, R. H. (2015). Misbehaving: The making of behavioral economics. W. W. Norton & Company.

    Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving decisions about health, wealth, and happiness. Yale University Press.

    Xiao, Jing Jian & I. Olson, Geraldine. (2009). Mental Accounting and Saving Behavior. Home Economics Research Journal. 22. (92-109)

    The simplest way to save that no one teaches you

    For most people, money management is one of the most painful parts of adulthood.

    It is right up there with taxes and wisdom tooth extraction.

    If you’re like me, you’re constantly guilty about spending money. That coffee. Those shoes. That not-the-cheapest Uber I took once. But then I ask myself, if you can’t enjoy spending money, what is the point of earning it?

    Another common problem is the “end of month crunch”. You get your salary at the beginning of the month, and you feel rich. Life is wonderful. But by the end of the month, you’re reduced to Maggi dinners and movie nights at home.

    Still, others don’t worry about money until the “big unexpected event”. Your phone falls into a puddle. Your friends plan a trip to Ladakh. Horrors! You will have to ask your parents for help. And isn’t that always fun?1

    The problem with trying to spend less is that it is painful and ineffective.

    Our parents’ approach to saving was simple. Don’t spend anything. Ever.

    The traditional way of saving focuses on spending less. That is ineffective (not to mention painful) for two reasons. First, because it is hard to track expenses. Especially because so much of our spending is in cash. Second, despite our best intentions, most of us are unable to resist spending when the temptation arises (e.g., that friend’s coworker’s birthday we MUST attend). So, at the end of every month (with the precision of a Swiss watch you can’t yet afford) we gasp at our bank balance, vowing to save more next month.2

    A far more effective way to save? Save before you spend.

    Warren Buffett said it best. “Do not save what is left over after spending. Spend what is left over after saving.” This isn’t just another quote from your family WhatsApp group that you can blindly delete. It is one of the most effective ways to save. And it is really, quite simple.

    First, set yourself a monthly savings target. There are multiple ways to do that, which we will explore in later articles. The important thing is to be comfortable with that target. Commit to too much, and you will miss that target and be disappointed.

    Then, right after your salary comes in, transfer that money from your salary account to another savings account. Why do we recommend a separate account? Because you’re far less likely to spend money from your savings account, than from your spending or salary account. This is due to a powerful psychological phenomenon called mental accounting. More on that next week.3 45

    Even better, make that transfer automatic. That is a great way to overcome the self-control problems that will invariably crop up.

    Then you can spend the rest guilt-free.

    With this method, you will be saving every month without even thinking about it. Once you’ve made those savings, you can spend the rest of your money guilt-free. To me, that is the best part of the “save before you spend approach”. You don’t need to worry about whether you can afford those extra little luxuries. So go ahead, savour that coffee, enjoy that Uber ride.

    Sound good?

    Welcome to EasyPlan.

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