This booklet from author and success coach Steve Chitty was created for entrepreneurs, freelancers and everybody else who are earning good money but still struggling to keep their heads above water. The booklet contains five simple tips that will help you gain more control over your finances. (PDF file, 25 pages, 332 KB)

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Unformated preview of the document: '5 tips - secrets to help you bank more money' (Part 5):

Month 1*
Month 2*
Month 3*
$8000 (income)
$800
(Giving) $800
(Long term
savings)
$6400
(Living)
10%
10%
80%
$1000 (income)
$100
(Giving) $100
(Long term
savings)
$800
(Living)
10%
10%
80%
$4000 (income)
$400
(Giving) $400
(Long term
savings/investment)
$3200
(Living)
10%
10%
80%
* Please note these simplified
illustrations are based on 'after
tax earnings'. You will also
need an effective system to
ensure tax is kept aside. I
recommend talking to your
accountant about an effective
strategy for your situation.
© Steve Chitty 2011
14
Every time Kelly pays herself, whether the amount is large or small, she allocates
her earnings by predetermined percentages. Even on a tight month she sticks to
her rules. At the end of the year she will have achieved a similar result to Bob as
they have both designed a successful Automatic Investment Plan.
In each of these scenarios, Bob and Kelly (regardless of how regularly they were
paid):
· Told their money where to go as soon as they were paid
· Removed the emotion out of the process
· Provided for all their needs whilst also supporting causes they believed in
and building their 'nest egg'
Even When it Hurts
A successful Automatic Investment Plan must also stretch us and push our
boundaries a little. I've heard it described as 'creating the vacuum'. To create
the vacuum we must suck something out at the start knowing it will leave a
vacuum at the end that we will need to fill. For example if our AIP dictates that
we save 10% of our income but one week it looks like we can only save 5% we
still do the right thing first by saving 10% and then working out how we will sort
out the shortfall at the end. It may mean we revisit our budget and trim some
unnecessary expenses for that week, that we work a bit harder next week,
maybe we even sell something we don't use anymore. Whatever you need to do
is up to you but the key is to CREATE the vacuum! Do the right thing first and
then be CREATIVE about how we are going to pay for it! I'm not advocating an
unrealistic or unsustainable AIP – I am merely encouraging you to commit to
what you really believe in, create an AIP that motivates you to do better for
yourself, and put positive pressure on yourself to make it work… even when it
hurts.
© Steve Chitty 2011
15
Summary - The Keys to a Successful Automatic Investment Plan are
- It must be automatic - a 'default setting' ideally done by automatic
payments (Do it… then think about it!)
- It must be calculated carefully taking into account realistic living costs and
realistic savings targets.
- It must stretch you and motivate you to do better for yourself and others.
© Steve Chitty 2011
16
4. PAY YOURSELF FIRST!
The first practice of the wealthy is to pay yourself first. This does not mean going
to the mall and buying a new shirt or television. That is not paying yourself; that is
paying someone else. Paying yourself first means that you invest your money so
it grows for you. – John Burley
Did you notice I've used a larger font for this secret than for any of the others? In
case you didn't notice, or found it a little hard to read, I've written it again below
just a little larger.
PAY YOURSELF FIRST!
Now you may be having one of those days where you aren't really noticing things
properly so I'll have another go.
PAY
YOURSELF
FIRST!
© Steve Chitty 2011
17
You may have noticed that this secret is Pay Yourself First. Paying yourself
first is the key to keeping more of the money you earn. Paying yourself first is
the very mechanism that ensures the money will get to you so you can keep it.
Paying yourself first can be a little confusing to get our heads around and most of
us go wrong here. Let me use a business owner as an example of where most
people go wrong. Let's consider John who runs his own printing business:
John's business generates a good income but he often finds that by
the time he has paid his regular bills, paid his staff, given the landlord
his rent, paid the car lease, and sent the cheque off to the plumber
who fixed the leaky tap in the

Unformated preview of the document: '5 tips - secrets to help you bank more money':  Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8