Education can get expensive. Believe me, I know. I’ve spent just over £15,000 to graduate with a BA (Hons) degree in Graphic & Media Design, it was money well spent (I do hope you’re able to note the sarcastic undertone). Forget about formal education. What about learning a practical set of hard skills? From learning a new language to a new instrument, you’re going to need a few lessons and resource materials to make any progress. You could be frugal, go at it on your own and watch as many DIY tutorials on YouTube, but with so many videos contradicting each other, it’s difficult to know who to trust. Or you could speed up your learning curve and sign up to a few online courses, pay for a teacher and invest in yourself. I’m not saying one is better than the other, but I’ve managed to balance the two.
“That can get expensive, it all adds up!”
Sure it does, but as Benjamin Franklin said,
“If you think education is expensive, try ignorance.”
I’ve managed to get on top of my finances so that whenever I need to spend money on anything related to learning I don’t bat an eyelid. How have I been able to get to this position? It took a lot of hard work and self-control and I’m going to share with you my process.
Secrets of the millionaire mind
I cannot take full credit of what I’m going to share with you. Everything I’ve learned regarding money management all comes from T. Harv Eker’s book, “Secrets of the Millionaire Mind.”
“It comes down to this: either you control money, or it will control you. To control money, you must manage it.”
Eker places great emphasis on managing your money wisely. What’s the best method for taking control over your money? Splitting it up into 6 different accounts.
This book helped manage my entire life!
Whether it’s money coming in from a steady salary or a one-off gift, you should try to split your income into the following accounts:
- 50% into your Necessities Account – We all have bills to pay. Use this account for just that.
- 10% into your Long-Term Savings Account – This should be dedicated to your future house, holidays and/or your ‘rainy day’ fund.
- 10% into your Giving Account – It’s always good to give. Make sure you have enough for any charitable donations.
- 10% into your Play Account – With all that saving and money management, it’s good to treat yourself every month. By using the money from this account you won’t feel guilty about going on a shopping spree.
- 10% into your Financial Freedom Account – This account should only be spent on generating more money. Investing wisely will assure your financial freedom.
- 10% into your Education Account – Use this account specifically for educational purposes. Whether I need to buy an online course, book or pay for someone’s time, this is where I take the money out from.
Although this article is focused on how I finance my learning, it also shows you how I finance my life. As you can see every account covers each aspect of my life. The important thing to take away is to live within the means of each fund. If I want to buy £50 worth of books and there’s only £5 left in the Education Account, I’ll have to wait until the account is topped up. The same goes for everything else.
What I’ve spent my money on
As long as each purchase is justified I will go ahead with the sale with no buyers remorse. There have been times where I have spent £100 in one go whilst trying to learn a new language, in the last 3 months I’ve spent £60 on books alone. Just yesterday, I placed an order for 3 more books that equated to £30.
A bank statement from my Education Account.
If I had kept all my money in one account, it would’ve been hard to know if I was going over my Education Fund and eating into my Long-Term Savings account. Splitting the money up makes everything easier to manage.
Why have an Education Account?
When I graduated from university with my degree in one hand and the other fist-pumping the air (again, take note of the sarcastic undertone) I remember telling myself that I’m done with education. I no longer have to worry about exams, studying or learning something new. Shame on me! Eker said it best,
“If you’re not continuously learning, you will be left behind.”
If you’re not taking the time out to learn new skills you’re not growing, you’ll be a one-trick pony that will eventually be phased out. If I had kept the mentality of no longer learning anything new I would’ve remained as a graphic designer making posters on Photoshop. Taking the leap and starting my own business, I was forced to learn new skills that helped me in my career. Soft skills like, public speaking, email etiquette, and time-management. To hard skills like, how to take good photographs, how to edit video, how to record audio and the list goes on.
Working on my business. This opportunity would have not been available if I didn’t develop myself and learn new skills.
Although I was forced to learn all of these new skills to stay afloat in my industry, I soon realised the importance of continual growth. Eker goes on to add,
“The more you learn, the more you earn.”
Even if increasing your income isn’t on your radar, learning new skills to help you develop as an individual will open up new opportunities and experiences. This is why it’s important to have one account dedicated to your personal development, it’s the first step to taking continual growth seriously.
Make sure you live within your means
In order for this system to work, I cannot stress to you how important it is to live within the means of each account. I know how tempting it can be to take a little bit from the Education Account and use it to pay off your bills, but you need to stay strong and stick to it. Eker adds,
Saying “I’ll start managing my money as soon as I caught up” is like an overweight person saying “I’ll start exercising and dieting as soon as I lose twenty pounds.” It’s putting the cart before the horse, which leads to going nowhere… or even backward! First you start properly handling the money you have, then you’ll have more money to handle.
It’s important for you to remain consistent with your money management. It takes a lot of discipline and hard work to get to this level, but if you’re truly serious about growing as an individual these are the practices you’re going to need to take. It took me a while to grasp the concept of splitting my money up, especially when I had bills to pay, but I kept at it. Now, as soon as money comes in it’s almost second nature for me to move the money around. It’s a great feeling to know that when I want to spend money on a few books or online courses, there’s a little bit of money stashed away in a dedicated account.
If splitting up your money unsettles you I would start off slow. If you don’t want to manage your salary right now, buy 6 empty jars and split up any cash that you come across. One day when you least expect it, you may realise that you have a bit of money in your Education Account to buy a couple of resources that’ll help with your personal growth.