LESSON 2

FOCUS ON THE FINANCIAL HORIZON

It’s all too easy for some people to get sidetracked, and give in to demands to spend money on daily treats. When your teenage daughter splashes out £50 on a new skirt, she won’t be thinking about all the other things she won’t be able to afford as a consequence, right?

Not focusing on the financial horizon means we’re more likely to splurge, instead of thinking about saving for things like holidays, bills or the future. It explains why some people struggle to stick to budgets, and are more likely to overspend.

REWIRE!

◆ Dan recommends a trick he calls goals and anti-goals. You pair up something you like doing day to day, such as eating out, with a longer-term aim like going on holiday. Make one account to cover both goals, and transfer a set amount into it each month (say, £200). This forces you to consider the long-term impact every time you go to dinner. If you decide to go to an expensive restaurant, you take money away from your holidays. The idea is to think more about whether the meal is really a good use of funds. And you’re likely to spend less on dayto-day costs in favour of saving.