The Piggy Bank – When you are young, parents and society encourage you to use a “Piggy Bank.” In this ‘personal bank’ you put all the coins that you save, the money given, maybe an allowance, and then back in the old days you could break it or open it to see how much money you had. This was exciting, especially if you were saving towards a new skateboard or game or book.
As you get older the bills come and your responsibilities increase. Soon the excitement of a “piggy bank” is gone as you know that your paycheck is just going “somewhere else.” However, the excitement and anticipation should still be there because no matter what you are paying it is still going toward YOU.
Every piece of our spending is going toward something that had or is currently providing us a product or service. From student loans to an internet bill, these things allowed (or are allowing us) to move forward.
The truth is that our money is here to serve us. Not us serving money. When you adopt this mindset, then you can begin to understand that we have to develop a healthy relationship with money.
We suggest reinventing your piggy bank (oink oink!). Follow the “O.I.N.K” mindset. OINK standing for Optimize, Invest, Notice and Know. Let’s explore them here:
O: Optimize your income by forfeiting on what you really don’t need, but also things that will contribute to your health. You don’t need to smoke cigarettes so if you decide to quit, put those $10 in your “piggy bank.” Eat out less. Every time you cook at home or bring your lunch to work, place $5 or $10 in your “piggy bank”. You are optimizing the things you spend on, while paying yourself for it. Within a month you will have enough for that concert you’ve been wanting to attend or for a gym membership – which leads you to invest in you.
I: Invest in you. What is better, smoking or getting on a treadmill? A Mutual fund or going out to the bar? Certainly the treadmill and a mutual fund take precedence. But how often do we think of this when that $10 bill comes out of our pockets? Certainly not enough. But with a “new money mindset” we begin to see things far more differently, leading to the next point: Notice.
N: Notice how you spend your money – even if just for one week. Put it in notes on your iPhone or on a small pad. Does how you spent your money reflect your values, who you are, or what you are trying to accomplish? If not, then it is time for some reflection and to start making some cuts.
K: Know who you are and what you are about: Too many times we have “regret spending.” This is the spending that we often question either immediately after purchasing, or when we start using what we have purchased and ask ourselves, “Did I really need or want this?” This is a time of serious inventory to see if what we are throwing our money towards will achieve our greater goals.
When we first change how we see money, explore our relationship with it, and then make moves to transform our financial situation we will begin to see our savings grow. So O.I.N.K.! Your piggy bank is waiting for you.