“Do not save what is left after spending; instead spend what is left after saving.” ― Warren Buffett

Money makes us crazy, so it’s difficult to admit the formula for always having money is simple. You have to create a gap between the amount you get and the amount you spend and put the difference to work. You do that by either saving or investing.

Good habits are the result of consistent, incremental improvements over time. By the same token, bad habits stick around even when our circumstances improve. If you can’t manage a small amount of money today, you won’t develop the skills to handle a large amount of money tomorrow. While most of us enjoy dreaming about what we’ll do if we got a huge gift of money, money never seems to solve financial problems.

People who have already figured out how to save, talk about paying yourself first. For those of us struggling to get it right, that seems like nonsense. You can put R1,000 in a savings account at the beginning of the month, but what’s the point when you know you’re going to need that money before the end of the month?

There’s something that happens before you pay yourself first that has nothing to do with money. Here’s the secret: A saver says ‘no’ more than you do.

The gap between what you earn and what you spend is the result of the decisions you make before you get money. If you believe that a giant wardrobe, lots of gadgets, a new car and a house with more bedrooms than inhabitants will make you happy, no amount of money is ever going to be enough. Whenever you get more money, you’ll want to use it to buy more things. The gap between what you spend and what you earn can never grow. This is a problem.

Saving starts by knowing the answer to the question, “What do I want my money to do?” It’s a question with no wrong answer and you never have to answer it to anybody else. However, if you don’t answer that question for yourself, you’ll never figure out how to manage your money.

What do I want my money to do?

Here are a few examples of answers to the most important question in money, as well as how that will affect your financial future.

• I want my money to buy me social acceptance.

This is a legitimate desire and sometimes it even works. If you crave social acceptance above all things, your house, wardrobe, car and collection of toys will get bigger with every increase. While most of us need these things to live a full and happy life, it becomes a problem when you keep spending on them to prove to other people how much money you have. At some point your income will stop growing, but your house, wardrobe, car and collection of toys will continue to grow. You’ll go into debt. If you want your money to do this for you, you have to accept that you’ll never save. It’s okay if that’s your choice, as long as it’s a conscious choice.

• I want my money to buy me security.

When you want a sense of security from your money, it becomes more important than buying things, which means you have a reason to say “no”. This will be the first of many “nos” that will make the gap between what you spend and what you earn bigger.

• I want my money to buy me freedom.

Whether it’s freedom from a job you hate, freedom to spend more time with your family, travel the world or pursue a passion, your money can get that for you. The sooner you want the freedom, the more you have to say “no”.

• I want my money to sustain me in retirement.

If you’re lucky, at some point you’ll be too old to work. If you are happy doing a day-job for 30 years, you don’t have to say “no” too much to get this. Times your monthly expenses by 300. That’s how much money you need to retire and never run out of money. If that number is too big, you have two options: save more or say “no” more. While most of us aren’t in control of how much we earn, we can all control how much we spend.

Being outstanding with your money doesn’t have to be hard. This series of articles will give you all the tools you need to get your house in order to start investing.

This series of articles was sponsored by OUTvest, and written by Just One Lap in 2018.  It’s timeless wisdom that needs to be out there – in public spaces where it can feed into ongoing discussions about long term financial wellness.