The 3 Ws and How of The 30 Day Rule for Finance:
What Is the 30 Day Rule for Personal Finance?
The 30 day rule is pretty simple. Here’s how it works. Any time you are about to make a non-essential purchase, you instead pause for 30 days.
After the 30 day wait, you can reassess. Do you still want the item or service you were going to purchase? If so, you can buy it guilt-free, knowing that you took the time to think it through. If you no longer want or need to make the purchase, you can simply save that money instead — or use it for something that does align more with your current wants and needs.
Example of the 30 Day Savings Rule
You head out for some back-to-school shopping for your children. You pick out all the essentials — new clothes, school supplies, and whatever else was on your list. And you spot a new pair of earbuds that would be perfect for your workouts. The problem is, new earbuds weren’t on your list. So, you’re looking at an unplanned purchase of a new item for yourself.
With the 30-day rule in mind, you can mindfully pause. You can move forward with the planned purchases for your children and put the optional purchase on the back burner.
30 days later, if you still want the earbuds, you can return to the store to buy them. You could even set a reminder on your phone to check in after a month.
Why Does the 30 Day Rule Work?
The 30 day rule enables you to spend with more intention. By inserting a pause into your optional spending decisions, you can take time to think about what you really want.
It’s also a way to remove guilt from purchases. We all make unplanned purchases — and that’s totally okay. But if you find yourself feeling guilty after buying something, the 30 day rule might be a good option for you.
After all, if we can have the self-control to wait 30 days before buying something, and we still want it after that wait, then we can fully enjoy that purchase without guilt.
How to Maximize Your Money Using the 30 Day Rule
The 30 day rule can help you improve your spending habits, which can result in more intentional purchases, more money saved, and less financial stress. But it’s not all about saving money. It’s really about being intentional, and thinking through your spending decisions. Here’s how to maximize your success with the 30 day rule.
Know When — and Where — to Save
The 30 day rule can be a powerful boost to help you save more money. After pausing for 30 days, you’ll have had time to think about whether you truly want or need that purchase. And in many cases, the answer will be no.
If you decide not to make the purchase, what should you actually do with the money? Well, you have several options:
- Use it to pay down debt or invest
- Keep it in your checking account
- Transfer it to a savings account
Open a high-yield savings account to earn more interest
You could choose to make small transfers to your savings every time you decide not to make a purchase. Or, you could transfer once a month based on your spending habits for the previous month.
Consider Investing or Paying Down Debt
For an even bigger boost to your personal finances, consider using your new savings to invest or pay down debt.
Paying off debt should generally be your top priority, particularly if it’s high-interest debt. This can help you save money on interest, lower your total debt, and even improve your credit score.
Investing for the future should also be a top financial goal. You can start a brokerage account to buy stocks, or contribute money to your workplace retirement account.
Conclusion:
Enjoy your purchases guilt-free. Remember, money can’t buy happiness — so if you truly do want that purchase, and it might bring you a joy or satisfaction, be sure to enjoy it guilt-free.
The 30 day rule isn’t about being a stickler and never spending money. It’s just about pausing to intentionally think about your purchases before making them. If after a month of waiting you still want the item or service, go ahead and buy it — and enjoy.
The original article was published by Happy Money. You can read more about 30 Day Rule here. Your Turn!