If you have ever struggled to stick with or heck, even start pursuing a goal because it felt too hard or too overwhelming, this episode is for you.
In this episode you will learn:
- That all or nothing thinking is not helpful for creating and sticking to our goals
- How to implement the one percent concept and start creating your money goals
- How to save money no matter what your income is
- How I used this concept to start my investment portfolio
- How you can apply this 1 percent concept in other areas of your life
You can listen to the episode above or read the unedited transcript below.
Meaghan Smith 00:20
Hello beautiful people and welcome to another episode of the Money Mindful Podcast. I am your host Meaghan Jean Smith. I'm a money mindset and life coach for women, I help women change the way they think about themselves to create the extraordinary life they want to live on purpose. All right, before we get into it today, I want to tell you about book club. Book Club is tonight, if you are listening to this episode, when it's released. So that's Tuesday in Australia, on the 30th of March, if you're listening to this in the future, I'm sorry, this has already happened. But you can always catch the replay. I'll tell you about that in a moment. We have our book club meeting tonight, it's on the Money Mindful Facebook page. And there are links to that in my website, on Instagram. And on Facebook. If you're following me on Facebook, you're already on the Money Mindful page. Tonight we are discussing the book by Lynne Twist called the soul of money. This book is a phenomenal book, Lynne Twist approaches money like no other person I know she has a very unique perspective on it. And I think this is a book that everybody should read. And I would love to encourage you and invite you to come to book club tonight. If you've never heard of book club, or if you're a new listener to the podcast, I just want to make sure that you know that you're invited. Anyone is welcome. It's free. I do it on the last Tuesday of most months of the year, not every single month, but most months of the year. And it's a space where you can come and talk about all things related to money and mindset. Do you have to have read the book?
Meaghan Smith 02:34
No, you don't. It's not ideal. I mean, of course, obviously, it's great if you have read the book, but if you haven't read the book and you want to come, you're most welcome to come. The whole reason why I started Book Club was when I first started being interested in learning about money and taking charge of my money. I really didn't have a community of people I could talk to about it. And I felt weird. I felt uncomfortable talking about money. And as I progressed with this podcast, I had the idea to start the book club to create a space where women can come together and explore concepts around mindset, scarcity, mindset, abundance mindset, but through the vehicle of reading a book and learning and being able to discuss it together. So if money and mindset is something that you're interested in, I'm assuming it is because you're listening to this podcast, book club is for you. It's a place where you can come and not just talk about the ideas. Because if you don't know this already, I used to be a teacher. So I always get everybody on board with how they can actually apply what they've read in the book. So we're not just passively reading something for entertainment, we can actually take what we learn out of the book and apply it in our lives. So book club is on tonight. It's at 830 Australian Eastern Standard Time. For those of you in America. I'm sorry, that's pretty early in the morning, and you might need to catch the replay that will be posted on the website and on the Money Mindful Facebook page. If you're in Europe, however, it's in the morning for you guys. So come along. Okay, enough about that. Let's get into this episode, which I've titled 1% is enough this episode is actually inspired by the book Profit First. If you've been following along you would have heard that I did an interview with Kate toon recently. And she mentioned the book Profit First in that episode and at the time I'm I hadn't actually read it. But because of the magic of recording ahead of time since then I've actually gone out and bought that book and read it. And I originally actually had it listed as a book that I would do in Book Club. But now that I've read it, I might not do it in Book Club, because it's more, it's very specific to people who have businesses and not everybody who comes to book club has a business. However, if you are in business, and you have not read this book, go out and buy it immediately. It's called Profit First. And I actually should make a link to it for you on the website. At the time of recording, I haven't done that. But I may have done that for you by the time this comes out, because it's helpful, being able to have a place that you can go and get the book straight away. Okay.
Meaghan Smith 05:58
So 1% is enough, what am I even talking about like that? Alright, so I'm going to give you some examples of common problems that a lot of people have, and especially my clients, this shows up a lot. And that you want to do something like save for a house, or create an emergency fund or run a marathon, or become really good at yoga, there's something that you want to do in your life, but it feels really big, it feels hard, it feels like it's not possible for you, or especially for, for example, saving money, you might struggle with saving money not being able to put money away, and it just feels too difficult because the money comes in. And by the end of the pay cycle, you've spent it all and there's none left over for savings. If this is you. There's nothing wrong with you Don't worry, you're in the right place, I'm going to teach you a hack today that you can do, which will guarantee that you will be able to save money, no matter what, how good is that? Even if you're in debt, okay. So often what I see in my clients is a combination of, or just one of these three things that stops them being able to create what they want in their life. And it's this scarcity, thinking like,
Meaghan Smith 07:34
there's not enough time, I don't have enough money, or I don't have enough of something to do with your, with your self concept like confidence, to be able to do something. So let's focus on a money example. Let's say you've got a goal and you want to save for a house deposit, and you need $80,000, let's say, and currently, you don't have any money saved. And what happens is, we think that it's too big, it's too hard. And so we do nothing. It's like this all or nothing thinking, either we save $1,000 a week or a month. And if we can't do that, it's like, ah, have blown it. Right? I can't I can't do anything. Does this happen with you? I bet it does. Because it's such a common issue that people have this all or nothing thinking. For example, you have a goal and you want to exercise five days a week. But then one day, you don't exercise. And so then it's like you blow it off. And what happens is you don't end up exercising any days of the week, just because there was one day when you didn't do it. Or, on the other hand, you come from this thinking of it's not enough. And really all you need to do to train for that marathon, let's say is go running three times a week. But there's part of your brain that says that's not enough. We have to do it five days a week. And so you plan or seven days a week, and then you plan to do that, and then you can't stick to it. And what happens, it's all or nothing thinking then you don't end up doing anything. Right.
Meaghan Smith 09:28
So this is so common. So if this is your nothing's gone wrong, truly, I'm going to teach you something today, which I apply with money, but you can actually apply it in any circumstance. In fact, most of the concepts I teach you on this podcast, relate to money but you can actually apply them to any area of your life. And it's the 1% is enough concept or rule whatever you want to call it. As I said, I was inspired by this by the book profit first. And basically, in this book, it's about how to create your business. So it's profitable. Because what a lot of businesses do is they have a business. And then they spend all the money that comes in, and you might be a million dollar business. But if you have, you know, $900,000 worth of expenses, you're only $100,000 business really, or so many people in business, I know don't actually make a profit, right. They're not actually paying themselves a wage, like this is for people who work for themselves. And, Mike, the author of this book talks about how to get your business to have a profit. And he introduces this concept of that you pay yourself the profit first. And what a lot of people struggle with that he talks about in the book is like, how could I possibly pay myself a profit, when we have all these expenses, and I don't have the money to pay a profit. And what he talks about his start with 1%, take 1% of the income that comes into the business and then put it away. And if you think about that, like if you make $100, and you put 1% of that away, put $1 away in another account, you're not going to really notice it, are you it's not really going to affect your bottom line. It's so small, that 1% that it's easy to implement, because it's so insignificant in a way. And yet, it is so significant. And here's why. And let me just pause for a minute and just say, okay, perfectionist, I see you, I hear you, I know you're squirming right now thinking No way. 1% is not enough. That is no way not enough. That is silly. Why would we do that? Your brain is going to tell you that. So be prepared for that. But here's the thing, we get good at what we practice. And if you never save money, you get good. Every time you get paid, you are getting better at that practice of not saving, that is what you are getting practice at. right every time you don't save money, you are practising not saving money, right.
Meaghan Smith 12:48
So if you want to get good at saving money, you actually have to practice saving money. Now, if you spend everything you earn, every time you get paid, if that fortnight or that month goes pass, and you find by the next time you get paid, you have spent all the money and you haven't saved any of it, you want to be able to develop the saving muscle. And at first that might seem really difficult. And this is where a lot of people go wrong, we get the idea like Oh, I should be saving $200 a week or I should be saving $1,000 a week, whatever that number is for you. Okay, we all have different incomes, there's no right or wrong number, you go to put the 200 away and you can't you can't stick with it. You don't stick with it, because expenses come up. And then guess what? You dip your hand in the savings account or, or you just don't save at all, because you look at all your expenses, and you're like there's no money left over. But what if you just took 1% of what you made? Right? 1% that's it. So for every $100 you earn, you just put $1 away? What if you just did that, and you did that every time you got paid? What happens when you do that is you are strengthening that savings muscle you are putting into practice a new skill of saving money, and then you get better at it. And then guess what 1% might turn into 2% maybe you can start putting 2% away because you don't even notice that 1% and suddenly like You know what? I could stop putting 2% away. Now for those of you who are thinking this is silly, that's not enough money, because like if you put what 20 if you've got $20,000 and you putting 1% of that away, that's not a lot of money, right? But I want to tell you this story that something I did what happened to me and it was life changing. And it's relates to this. It wasn't 1%. But it was a very small amount. I've told this story before, but ages ago. So if you're new to the podcast, you probably haven't heard this. Basically, when I had kids, I just went into full blown protection nesting mode, and I thought, I need to save money for my children, I have to do this, I want to do this. And when I had my first baby, my partner had just started a new career. He was in his first year, as an intern, and we were living off, I think it was about 65,000. If we go back in time, like when he first started, that's what he was earning, and we had a baby. And so that's what we were living off. Right. And I just thought, Oh, my goodness, I can't possibly save $100 a week, or that just seemed like way too much money. And so I looked at my budget, and I looked at what was possible. And I thought, you know what, I can save $15 a week, I can totally save $15 a week without, without it being a problem. I know, every week, I can definitely have $15. So that's $30 a fortnight $60 a month basically. Now to you, that might seem so insignificant. And it did to me like I had lots of thoughts of, is this even worth it? Like, what's the point, it's only $15. But I was just determined to save some money for my children's future. And so I was just like, okay, that's what I can save. That's what I'm doing. Now, I don't know what the percentage was,
Meaghan Smith 16:54
what $15 was in a percentage, but it doesn't matter. It's it will illustrate in the story. Now, I just kept doing that, I was able to do it, I was able to stick to it. I never didn't make the payment. Because $15 I could handle, I could handle putting $15 away every week. Now what happened is over time, I had a second baby a couple of years later, and I wanted to do the same for my second child. And so that effectively doubled, but it was a couple of years later, and I was able to handle that easily. So then I started putting away $15 for each child a week. And so that became $30 a week, $60 a fortnight $120 a month. And again, you might be thinking it's not much money. So not really a lot. But I didn't think about it, it was just in another account, I got really good at it, I did it automatically every time I got paid, and that money just grew. And over time, it got to a point where I had $6,000 saved. And $6,000 is no joke. Right? That $6,000 is what I started my share investing with. And when I very first bought shares, that is that money that I used. And it didn't actually take that long, I think I might have put some extra little bits of money in here and there. But four years, over four years, I didn't think about it, I didn't really notice it, I just put that $15 away. And then before I knew it, I had $6,000 and I invested that money in shares. And I was a share investor, I had a share portfolio of $6,000. Right.
Meaghan Smith 18:51
So don't underestimate 1%. I mean, in my case, it was just $15 wasn't I don't know if that was 1%. But can you put aside 1% of your income, and you could probably put away more. But if you've never put money away, start with 1% because you won't even notice it 1% of your income, you are not going to notice that and even if you're in debt and you're paying off debt, you can be putting all your money to repaying debt. And I'm not going to get into that now. Just except for that 1% just put 1% away. And I'm telling you, it's not about how much money accumulates like the compound effect. But it's that muscle of developing a practice or a habit if you will, over time. And this is life changing. You can apply this to anything. Can you do five minutes of exercise every day? You know if you're trying to exercise can you just cut out one extra falafel in your meal. If you're trying to lose weight, like it all adds up. 1% is enough. And I'm going to end with saying, I know your brain is going to tell you that it's not enough that there's no point doing it, it's too little. But I can tell you from experience, it is enough. And it's such a small amount that you won't notice it in the beginning. But you develop the practice, and then you become good at it. And then you can increase 1% becomes 2% becomes 5%. Maybe it even gets up to 30%. Make a start 1% is enough. If you want to make change in your financial life in terms of saving money. Start with 1% and see what happens. develop that skill. All right. Let me know how you go. DM me on Instagram or send me an email. And if you are not on my email list what is happening, go to my website now and subscribe to my email list. I send out one email a week. Occasionally I send more if something really exciting is happening. Like recently I just did a workshop with the life coach University was on scarcity and abundance. Everyone who was on my email list found out about that they had notification of that they knew how to sign up for that if you're not on my email list, you potentially will not find out about these things unless you're following my every move on social media,
Meaghan Smith 21:51
which I'm sure you have more important things in life to do than to do that. So if you want to stay involved with what's happening, get on my email list, you just go to the money mindful website. That's money mindful.com.au. And there is a little button there where you can subscribe to my email list. All right, until I speak to you next time. Have a beautiful week. Bye Bye.
Be sure to join in on book club tonight. You can find out all the info and get the book here.
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