You have finally taken the plunge. You have canceled a subscription (Netflix for example) in order to save money. You may feel good about yourself. That £5.99 is going to matter, it is going to help you towards financial independence.
However, the risk is that in three months’ time, this additional money is absorbed by your costs of living. It is easily done with £5.99. Two nice cups of coffee at a well-known coffee chain and you could forget how much self-discipline it took you to save that money in the first place.
Therefore, there is an additional step that is essential for that money to make a real difference.
Pretend that you still have to make those payments, but to yourself.
You may have managed to live with this monthly or quarterly bill for quite some time. Years maybe. Somehow, it would just get lost among all the other bills as an ‘essential’ or as a ‘fact of life’. Unless you have had to cancel subscriptions because of a financial emergency rather than an attempt to live more frugally, the likelihood is that you would still be able to cover your essentials as well as the odd little treat without this sum ever being in your bank account.
The solution, therefore, is to create a standing order to your savings account for that exact sum , on the day that it would be due.
For example, my Netflix subscription was due on the 21st of every month. I have set the standing order up for the 21st of every month and labeled it under ‘SAVINGS NETFLIX’.
With this all automatically set, you can just carry on with life, knowing that your discipline and dedication to your new frugal way of life is paying off, £5.99 at a time.
To conclude: I wish I would have thought about this in the past. How much more would I have saved ? How much closer to my goal would I be ? (Maybe not more than £150 overall but still!!)