Your Frap Fund & You

Throwing money away. We can all agree that’s a bad thing, right?

But how do we make sure we aren’t doing it ourselves? Everyday?

Money has a very emotional component for just about everyone I know.

Like me. I never just throw money into my wallet; I always put the bills in order and facing the right way.

So yes, money is an emotion and the use of it should be as well.

I coach my clients to understand the emotional impact money can have and use that to their advantage.

An example? My so-called “Frappuccino Fund” (Frap Fund for short) is such a way.

First I always recommend that a client trying to pay off debt set up a separate bank account fund.

And we call it their “Frap Fund.”

Each time they are out and about and ready to spend money, I ask them to think about it first. Is it really worth the money?

If they decide no, they note how much they just saved. They do this each and every time they would have spent on a coffee, a dinner out, breakfast, etc you get the picture.

For each time you resist the urge to splurge, transfer that amount of money from your regular checking account and put it into your “Frap Fund” account. Which should NOT have an ATM card or any kind of easy access to get the funds. The point is to SAVE money, not use it as your ‘paint the town red’ money (that is in a completely different account if you are anything like my wife!!!)

Several years ago my wife and I decided to practice what I preach.

We set up our very own “Frap Fund” and we began to transfer money into that fund every time we saved money by NOT doing something on impluse.

We went as far as to even save the money from store coupons and those store clubs.

Let’s say I was on my way to Starbucks, which was a daily occurrence for a Frap and then of course a muffin, I would instead go to the office where the coffee is free and transfer the $5 or $6 straight way from my bank account to my online account.

After one year we were able to save over $8,000 doing this!

To me that was real money saved!!!. And, of course, @TheDeeView had to something to spend on shoes from @Zappo's. But wait that is another blog!

The beauty about doing this technique is that it creates a win for you and helps build savings, which is a vital factor in financial planning.

I think as we all move forward from this last recession we really need to focus on savings while reducing our debt load.

Plus, as you might notice, one of the components in the word Fund is Fun!

I find this method of savings, that can involve the whole family is actually fun!

Try it for a week and let me know in the comments below how it went and how much you saved!