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There Is No Such Thing as "Savings"…

Contrary to most personal financial management programs, the Money Mastery system teaches that there is actually no such thing as “savings” and that all money is to be spent. What matters most is when and how you spend it. Allocating money to savings is actually “spending” money by putting it aside to use at a later date for necessary needs and wants.  The key here is to change the way you perceive savings and start looking at it as “delayed spending.”
Because your money is going to be used up at some point, it is important to understand that concept of “delayed spending” so that you can be sure all of it will be spent in a way that will bring you and your loved ones the most satisfaction.
What is Delayed Spending?
You can begin to look at savings as “delayed spending” by tracking your money. This will get your spending under control, which in turn will lead you to find more money. This is good.  But it is not the end result! Now your focus must be turned to the future and what you are going to do with the newfound money. Usually what people do once they see that controlled spending brings in a surplus of funds is to consume that extra money the minute they get it. This is wrong. What they should do is put this moDon'tWaitney away for “future spending” so it will be available later when it is needed. Unfortunately most people do not understand the importance of this simple concept. Instead they are seduced into believing the notion perpetuated by a consumer-driven society that they can have everything they want right now and everything they need and want later. How about you? Are you enticed by these messages?
The actual truth is that if you want to spend all your money on consumable goods and high interest credit card purchases now, then you cannot assume you will have much of anything you will want in the future, including a financially secure retirement. At some point, you have to make a choice: You can either prioritize the way you spend your money so you will be prepared for upcoming events, or you can recklessly spend every penny now and have nothing for the future.
Bear in mind…

You can have anything you want, you just can’t have everything you want.

People who understand this concept know how to prioritize their spending so that they will be able to have the things they want and need right now, as well as what they will need and want later. This often requires them to sacrifice in one area of spending so that they can have what is necessary in another area.

For example, a man may feel that taking his wife and children out to eat twice a week is an important family activity. It’s perfectly fine for this man to use his money in this way, if he wishes, but he must also realize that he may have to cut down on groceries and entertainment if he wants to have extra money available to “spend” for the future.

Perhaps eating out isn’t your thing…maybe buying a new outfit every month is. Naturally, the choice is up to you. The key, however is that you must make a choice because it’s impossible to have everything. As simple as this might sound, many people truly do believe that they can buy a new outfit every month, for example, and eat out all the time when they have no  way of paying for both. This kind of behavior not only keeps people in a cycle of perpetual overspending and debt but it also eliminates all possibility of seeing money grow in value over time. It prevents them from creating a cash surplus and all the advantages that come with that surplus, including the opportunity to make even more money.

The power of a cash surplus is something that you can only understand intellectually to a point but then must personally experience it if you want to truly comprehend its power.  A surplus of money lets you experience the power of the “multiplier effect,” which means that even a little bit of surplus will multiply quickly in your hand. The opposite is also true: the more you spend and are behind financially, the more behind you are likely to become.

Learn to understand the importance of creating a category in your Spending Plan for delayed spending…a category entitled “savings.” To be able to do this, you will have to make a choice about your spending and begin to understand that it is impossible to have everything you want. Now is the time to determine your priorities and what you value most.  What you most value will determine where you spend your money. Don’t look back in 20 years and see that what you valued most was fast food and clothing that you now cannot wear. Make a choice now to change your future by changing the way you look at your present.

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