How to Begin to Accumulate Cash

Back when I was knee deep into financial turmoil I went to the kitchen of my West Hampstead overpriced rental flat in London and grabbed 3 glasses. I taped a label to each one:

• For investing

• For saving

• For charity

At the time I was well in the financial red zone, falling further with each passing month and surviving as i could on a little freelance work. I took the good advice of books like ’The Richest Man in Babylon’ and started paying myself first.

Each day during the first 3 months I deposited 50 pence in each glass. At the end of the month I would have 30 pounds to invest, 30 pounds to save and 30 pounds to give. Whatever needed to be paid had to wait, first I collected a little money for myself. The amount wasn’t really important, it was the habit that was important. I slowly raised the amount little by little and when I was back into positive monthly cash flow I changed it to 10% for each glass.

Now we may be short on cash flow from our somewhat misguided property investment but our other finances are well in order, because I managed to change my money habits and thought patterns. If you have problems managing your money try setting down the three glasses and put money in them when you wake up in the morning. You can start the day thinking about saving, investing and giving instead of spending.

When you have spent your whole life spending everything that comes in, somehow it seems important to feel yourself with money. To login to your bank account and see money accumulating is essential, it feels great and it’s the only way you can become wealthy. (Not because you save everything but because you are capable of not spending everything.)

People will always find excuses as to why they can’t pay themselves first, why they can’t cut expense here and there to start accumulating money. The kids need new clothes, we need a new car to drive to work, if I don’t take a vacation (in a resort) I’ll be stressed all year long, what will our friends think, and the list goes on. I’ve heard them all from friends and family.

I’m not saying live your whole life below your means, just start taking steps in the right direction and stop making excuses.