Spenditude by Paul Gordon & Janine Robertson

Author:Paul Gordon & Janine Robertson
Language: eng
Format: epub
ISBN: 9780730372011
Publisher: Wiley
Published: 2019-06-22T13:00:00+00:00

Once you're in the black, you should never go back (to red)

This reminds us of the story (in chapter 1) of the people in the restaurant talking about money. Andrew, when talking to his partner Lucy, got great delight out of showing her an Excel spreadsheet that demonstrated how to manage money and stay in the black. ‘She was amazed and since then we've had a combined money narrative and plan, which is to stay in the black.'

What was it about this Excel spreadsheet that changed her spenditude?

The default position for Defenders is to stay in the black. They don't want to be in debt unless it's for necessary assets, such as a home, but even then they're keen to eliminate the mortgage as quickly as possible (see our second Einstein quote, on page 116).

For Slenders, this is a constant challenge and struggle. How do I manage my finances so I'm going forwards and not backwards? Staying in the black is a goal but not always a reality.

Spenders would simply switch off if you showed them an Excel spreadsheet, so we don't recommend doing that just now.

So, Slenders need to look at basic habit changes to move from red to black (negative to positive) on a constant basis. These habits are fundamental and in the past were a pain to complete. For most it was about tracking your money on a piece of paper or spreadsheet manually. And they gave up within two months (or sooner). Now we have technology that can track your spending, provide alerts when you overspend and, more importantly, provide you with simple awareness of where the money is being spent. No more spreadsheets, no more notebooks. It's automated and it's usually free with the service you receive from your bank. If not, there are plenty of apps out there to help you.

We're more likely to forgo small purchases in favour of large savings goals when we have smaller targets. Reframe your shift into black with smaller sub-goals and they'll feel more attainable, which will help you accumulate more savings over the longer term.

Which brings us to our second key action . . .

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