Words I like: More money is wasted through inaction than spending badly.

Money Mojo Memo: The Default to Save Technique

Most high-achievers have a rough idea on how much they spend on entertainment, groceries, transport, etc.

That’s fine, but you may be leaving more savings on the table, that you could be investing.

Here’s a simple fix I teach clients that kills five birds with one elegant solution.

Default to Save:

1. Have your salary or income go into your Reservoir, a current account that acts like a central hub for your finances.
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2. From this Reservoir, allocate funds to different accounts based on pre-set rules, e.g. 10% of paycheck goes to spending on fun, 10% goes to investing, 10% goes to house downpayment goal, etc.
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3. Focus on your spending account, where you’ve allocated a set amount of money you can spend without worrying about bills, as those are taken care of by the Reservoir.
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4. You’ll find excess money builds up in the Reservoir, which you’ll slowly start to use to invest more, and allocate towards your goals.

That’s it. Takes 20 mins to set up.

But it increases your saving and investing rate in FIVE different ways:

1. Fewer Blank Spaces: Your money has a higher utilisation. You can save, spend, and invest without guilt because each Euro, Pound, or Dollar has a purpose.
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2. Close New Money Immediately: If you suddenly earn more one month, you can just top up your goals-based accounts instantly. You don’t even need to wait until the end of the month to see what’s left over. But you wouldn’t know this if you didn’t assign your money a purpose to begin with.
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3. Disqualify Faster: When you get invited to plans you don’t want to spend on, you can turn them down faster. This keeps your money available to spend on the right goals and people, that make you feel better about yourself.
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4. Investing Momentum: The more you invest into your ETF portfolio, the quicker you wealth will compound due to a snowball effect. If you invest as and when you can, or without a clear plan, your money will have a harder time to grow.
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5. Opens Up Future Growth: When you put your money towards your goals, you’ll notice your performance and ambition increases - expanding your career and earning potential. And a fulfilling career is the #1 predictor of good financial wellbeing and a secure future.

Why This Works:

High-achievers are most motivated when they see progress.

Every salary received without a plan, anxiety increases, motivation drops.

Default to Save to see growth.

Implementation:

Set up a simple rule:

When you earn, move the money to specific goal pots.

Do this based on your priorities. Top up more for short-term goals.

Spend only after you’ve defaulted to save.

Best case: you get all 5 benefits above.

Worst case: you still increase saving and investing rates, and are closer to securing your future.

Win-win.

As promised, financial wellbeing you can apply.

Want more tactics like this to increase your investing growth and potential?

January is the best time of year to apply to the 1:1 Wealth Clarity Accelerator.

Plus if you sign up now…you’ll be money-savvy before summer.

Tap below to see if it’s a good fit:

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Default to save, see progress faster,

Sanam