“I save money and then I spend it all on something stupid.”
My friend was stuck in this cycle. He would get his act together with his finances only to watch it all crumble before he could enjoy the progress. This was me in my teens. I would save up a little bit and then blow it all without even thinking about it.
Nobody plans to be broke. Being broke is what happens when you have no plan.
I want to show you how you can save money for the rest of your life using The Houdini System.
Are you able to save up… for the long run?
Let’s say that you’re decent at saving by now. You’re just not where you want to be. Sound familiar?
You save a few bucks and before you can celebrate your beefy savings account, you hit another roadblock. You suddenly find yourself spending the money that you saved and then you’re not content with where your savings are at because you spent everything. You wanted to have money saved up in the bank, you almost got there, and then you spent it all.
It happens to all of us.
I’m hoping that you’ve used one of our exclusive theories to get some money together. You might have even used The Cancun Technique.
What’s The Cancun Technique?
The idea that you’re going to save money if you have a clear goal, cut everything out, keep your eye on the prize, and work towards the goal because you actually want to see the results.
This technique is named after Cancun because every year young people do whatever it takes to save up for a trip to Cancun where they’re going to spend $60 on entry into night clubs.
This same young person will then struggle when it comes to paying their cell phone bill or finding money for a course that will help them get a raise at work.
It’s time to look at the next level.
What do you do when you want to save money and then actually put it away for a huge purchase down the line?
You need to use The Houdini System. This is another theory exclusive to Studenomics.
How does The Houdini System work?
You put your money away when you reach a goal so that you restrict your access to this money in case that you ever want to access this money for some frivolous purchase or for any unplanned purchase.
You break your main goal down into targets and then you put the money away.
As you already know, you can’t just save up for no reason because that’s not going to work. You need to set a specific goal. You also need to put your money away so that you don’t spend it before you hit your main goal.
For example, if you want to make a down-payment on a home, you realistically won’t be able to save $50 in one shot. You might want to break this goal and then money away every time that you inch a little closer.
Why do you need to put your money away?
Nobody has the will-power to not spend the money. I can’t bring my wallet to the mall because I’ll walk out with a new iPad and I’ve been blogging about personal finance since 2008!
“I am a big believer in finding something that you really like that’s expensive. You can put your money on that, and then be frugal besides that.” — Jim Cramer
How do you apply this system?
“I can’t afford it this weekend.”
A friend was baffled with me when I told him this. I explained to him that I put my money away and that I had spent all of the money that I had for the next few days.
I was using this very system.
I use this for my big goals. You’re not going to use this to save up for a new pair of shoes or for lunch tomorrow. You’re going to use this to start your first business, buy a car, apply for a mortgage, travel the world, or make a dent in your debt.
How can you start using The Houdini System right now?
- When you save up enough money, you put it away and pretend you don’t have it.
- You then begin saving again.
- You repeat this process until you’re happy with what you have saved up in the bank.
At this point, you buy whatever your heart desires. For me this was a rental property at 20 years old.
Where can you “hide” your money?
For me it varies between a simple savings account and my mutual funds account. From there, you can put the money into bigger investments as your savings grow. I also create sub-accounts for my different goals (future trips and whatever else is on my mind).
You obviously want access to this money. You just can’t have easy access. If you have easy access you might be tempted one lonely evening to buy a new wardrobe or to fly your friends in for the weekend.
What’s my financial setup?
- I use Tangerine in Canada for my daily banking.
- I transfer money in from Paypal once or month or so. This really depends on when I get paid. I also get paid through checks from some sources.
- I keep some money in a basic savings account. This is really boring of course. I take enough risks with real estate and pro wrestling. Once the money goes into a savings account I can’t touch it. There’s no access to it. I have to wait to get paid again.
- I also keep some cash in my checking account. I suggest having some cash around for life because life always happens.
- I create sub-accounts for my different goals.
- I invest my money into bold projects (this website, real estate, etc.). In 2015, I invested in a trip to Charlotte and a new blog design since we badly needed a makeover around here.
I try to keep it simple because personal finance is personal.
I’ll let you in on a little secret. I bought into some basic Canada Savings Bond plan when I was 18. I started putting away $25 every week and now at 28 I’m excited to see where I stand. I should be expecting my balance in the mail any day now. I can sleep at night knowing that this money is available to me if I ever need to bail myself out (hopefully not out of jail).
This account is a true application of The Houdini System. The money is out of sight and I don’t really have access to it. If I wanted to get my hands on these funds, I would just have to call the number on the page and request a check.
Try The Houdini System and share your results. It’s kind of fun to pretend to be poor when you know you’re not (pretending to be rich when you’re actually poor sucks). Then I want you to grab a copy of Next Round’s On Me. You owe it to yourself to make this investment in the only personal finance book that goes from discussing FOMO to buying a rental property.
…Or you can make fun of the simplicity of all of this and do nothing. Most of my friends will bash taking small steps. Instead of putting aside $25/weekly, they end up putting aside NOTHING.