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  • Writer's pictureMike

#18 - Cash-flowing our wants, Maintaining our needs

Often times in life there's something we want, and while still balancing our needs, we conclude that the want is either out of reach, or is so impossibly far into the future that we give up. This leads to a period of time of researching, dreaming, and maybe one day, finding the grail gun/car/bike/boat/house/etc.. That's awesome. We could also just want it right *meow* and swipe a card for it, only to find out later that we really don't want it *that* badly. Maybe not as awesome. We've all been there.

One of the first things you can do for cashflowing a want is to work it into your budget, which will let you see how much per month/pay check is free to put towards it. I know budget is something nobody looks forward to doing - I didn't do one until 2021, and I wasn't able to stick to it until 2022. Budgets shouldn't be punitive - they should be deliberate spending plans, so you spend money on the things you care about, and less on the things you don't. Financial triage, so to speak.

Afterwards, do yourself a solid and get a high yeild savings account opened up at an institution like Allly Bank. It's important (in my opinion) to have this at a seperate place than where your direct deposit goes - out of sight, out of mind and all that. The reason for this is simple - at the time of this writing, US Bank is offering an annual yield of 0.01%, while Ally Bank is offering an annual yield of 4.25% on their standard savings account. Here's where the rubber meets the road - at 0.01%, your money doubles every 7,200 years (you'll be dead). At 4.25%, your money doubles every 16.9 years. Due to inflation, the price of the thing you want is going to double between 15-24 years depending on what the Federal Reserve does and for how long. If we aren't able to make our savings maintain or beat inflation, then we're loosing our purchasing power over time.

These rates aren't going to make or break your cashflow for a want, but they can ease it. Keeping it out of sight, out of mind, and regularly contributing to it every pay day is where the magic happens. The budget lets us begin with the end in mind, and honestly, you may find out midway through that you're not as excited, or there's something else you want instead. That's okay - keep contributing to it, and when you do find a thing you want again, you can repeat this. This time around, you'll be starting from something, and not nothing.

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