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The 3 Funds you need to master Guilt Free Spending

Author

AJ Neeme
September 03, 2024


The Greenline just turned 4 months old.
Thank you to everyone who sets aside the time to read this newsletter.

I hope you enjoy reading it as much as I do writing it.

One third of a year in, I’ve collected some learnings on what you’ve enjoyed most:

  1. Fluff-Free Personal Finance tips you you can start implementing straight away

  2. Business News Breakdowns

  3. Content Recommendations (Books, Podcasts etc)

Fortunately, I enjoy writing about all 3; so we’re trying something new going forward:

Each edition will cover all of the above while keeping reading time less than 5 minutes

What this means is that each Greenline Newsletter will have:

  • Actionable Personal Finance Strategy, System or Insight

  • This Week in Business: the download of the weeks’ biggest business stories

  • The Big Green Vault: misc content I enjoyed. Could be a book, podcast, series, YT video that entertained or taught me something.

So, let’s dive right to it!

3 Funds that will Improve your quality of life

We don’t always have the healthiest relationship with Money.

71% of consumers who engaged in emotional spending reported feeling guilty afterwards.

It didn’t matter if the driving emotion was positive (excitement, happiness) or negative (stress).
Anxious and bought yourself a little treat ? You’ll likely feel guilty about it.
Ecstatic about a promotion and booked a last minute getaway: You’ll likely feel guilty then too.

I’ve been there.
Usually, at the end of the month when I realized I had failed (again) at hitting my savings target.

In my case, I was overspending on 3 things:

  1. Social outings

  2. Random “One off” expenses: examples of this would be spontaneous purchases like video games, books and new gym clothes (it’s an Underamrour shirt with a Batman logo on it ok ? I had to buy it…)

  3. Travel: I had just moved to Dublin, Ireland and was traveling every 4-8 weeks (mainly to other European cities)

It sucks to feel bad about spending on things that are supposed to bring you Joy.

But, it’s inevitable if you feel irresponsible by doing so.

So, it pays off massively (literally and emotionally) to resolve this.

Here’s what I did:

There were 2 aspects to my problem that I had to solve:

  1. Mental/Emotional: identifying what emotions lead us to make financial decisions we regret and why.

    PS: I previously wrote a newsletter edition about identifying and overcoming the emotions blocking your financial progress. You can find it here

  2. Organizational: creating the right environment to break free of the emotion and the guilt associated. In my case, this is where a major part of my problem was.

I was very, very disorganized.

I didn’t plan ahead for large expenses (like Travel).

There was no cap and no restraint (I did however, draw the line on using credit cards to pay for purchases).

Getting organized meant:

  1. Creating a comfortable Budget with specific targets: 

    1. Saving/Investing as a priority.

    2. Travel Budget

    3. Socializing Budget 

    4. “Treat Myself” Budget (for all those random purchases. My wife’s idea!)

I wasn’t overly ambitious with my goals. Building a habit of hitting targets was more important than saving $500 Vs $,1000 to start.
But, I promised myself I wouldn’t go over the allocated amounts.

  1. Creating accounts (or vaults) for each: I would fund these on a monthly basis. Creating a bank account for each is a pain (and can lead to fees). Ideally, your bank offers the possibility of creating “Vaults” (Revolut does) which you can fund from your account.
    This forced me to be more selective, delay making impulsive purchases and plan ahead.
    Sure, you can still say “F it!” and spend it anyway. But, that’s the Emotional aspect of this Challenge.

Simple right? But in the years since, I’ve spoken to dozens of Finance Beginners facing spending issues and guilt.

Few had a budget.
None had dedicated funds for Socializing, Treating themselves and whatever else they overspend on.

Try it out and let me know how it goes.

If you have other tips, let me know. I’d love to hear how you manage your Money!

This Week in Business

  1. The newest $Trillion Company: Warren Buffets’ Berkshire Hathaway joins the $ Trillion club the same week the investing legend turns 94. With the passing of Charlie Munger earlier this year and Warren getting up there, the topic of succession is taking center stage. There’s no doubt Berkshire has incredible talent at its core. But, Warren Buffet and Charlie Mungers’ Aura will be hard to replicate.

  2. Nvidia is the Taylor Swift of Stocks: speaking of Aura, when Nvidia first crossed the $Trillion in market cap, I wrote it was much less known than its’ counterpart in the $Trillion club. Safe to say, the company is a bit more famous now… It announced record breaking results but the main questions is “Are Experts’ growth expectations sustainable ?”

The Big Green Vault

The information contained in this newsletter is for general informational purposes only. It should not be construed as financial or investment advice. Please consult a qualified financial advisor before making any investment decisions.