Skip to main content

The $1000 project

Some books provide a wealth of advice. The $1000 project has basically one idea - but it's good.


Why don't we have more money?

It's not like we don't earn money. At the average Australian salary of $75k, we'd earn a million dollars by 35. According to author (and financial advisor) Canna Campbell, people who find this out wonder "where has all my money gone?".

Well, it's not about salary. It's what you do with it.

Pretend savings

So often we 'save' money - a bargain at the grocery store, taking a packed lunch to work, or getting a lower rate on our mortgage. Other times we get a bit of extra money - some over-time at work, a tax refund, selling something online.

So where does all this money go? Often we spend it on something else. "I saved $50 on X, so I can afford to blow $50 on Y" is often the way we rationalise it. Clearly that's no actual saving at all.

What's the answer?

Step 1 - Canna sets up an extra bank account and calls it the "$1000 Project".

Step 2 - Every time she saves money she transfers the same amount to that account. Same for any extra money that comes her way.

Step 3 - When she hits $1000 in the account, she invests in shares. (Then repeats steps 2 and 3)

Is it for everyone?

There's maths and there's psychology. In maths terms, yes buying shares in small increments rather than in bigger chunks might cost her more in fees.

The power of her approach is in the incentive to save (or earn) extra money. The $1000 goal is small enough to be achievable in the short term. There's great motivation to spend less and save more when the target is within reach.

Want more?

While the strategy is the core of the book, there's also a chapter of ideas for earning extra money, a chapter of ideas for saving, and a chapter introducing the idea of shares - if it's new for you.

Why not invest in property?

As a financial consultant she sees a lot of people looking to buy a home. When asked why, they say things like "it's time" or "I should". She says it's not important to them - just to society.

Her advice is to work out what fulfils you. If you really want it, then it's easier to save for it.

What did the project teach her?

Before the book, Canna did this project for a year and reached $1000 many times. Along the way she discovered:
  • saying no to some expensive activities brings relief
  • a bit of organisation and preparation can save a lot of "outsourcing"
  • saving money is not a deprivation but taking care of your future self
  • the value of simple things, relationships, connections and creating memories
  • the power of small conscious actions to make a big difference

You can see my other book reviews, or subscribe to receive future ones.

Comments

  1. Mindful Money, her latest book is great and delves more into other areas. I obtained it from loaning from local library after I had a hold on it.

    ReplyDelete
    Replies
    1. Hi Illuminus. Thanks for that recommendation. A couple of people have mentioned that book to me since I posted this review. I've also added it to my borrow-from-the-library list. :)

      Delete

Post a Comment

Popular posts from this blog

My October challenge

Decluttering can be overwhelming. I've been stuck. Shelves and boxes and drawers full of stuff I should go through but not sure where to start. Aaagh - there's so much of it. The solution? So for myself (and for you if you want) I've developed a strategy. I've picked 31 categories in advance. I plan to tackle one item per day of October. If I miss a few that's OK. The point is to overcome overwhelm. To focus on one thing at a time. To move forward instead of being stuck. My favourite way to declutter is to sell online . (I even wrote a  free ebook of tips for selling online). I also like to recycle or upcycle things. Wanna join in? I've chosen categories where I think most people would have excess. If there's a category you have already dealt with, that's cool. Have a rest day - or go even further in one of the previous areas. The list Ok so here's my plan for this October. Bookmark this post or download the picture of my notes. For each category I ...

5 Reasons why we hoard - and they're wrong

"Less is More" is one of the catch-cries of downsizing. Often the fewer things we have the more we value them. So it's a great title for a book that's basically a manual for how to de-clutter your home. The introductory chapter of Less is More: How to De-clutter Your Life gives some great insights into why we find it so hard to reduce our stuff. Here are 5 of them - the last one is one of the biggest for me. 1. The cost of holding on. We were raised by our parents and grandparents and in their day items were expensive and space was cheap. It made sense in those days to hold onto stuff just in case you ever needed it. But today housing is expensive and items are cheap. It's hard to change a habit, but now we save much more by downsizing. 2. Keeping it in the family. For some reason we prefer to give things to those close to us. Again this was viable in the days of big families and lots of children to receive hand-me-downs. But these days we have smaller fa...

20 unplugged ideas

May 1-7 is Screen-Free Week . It's about spending time away from the screen and more time with each other - or doing things we love. It's a great chance to break the work-tired-watchTV-ads-shop-work cycle. This list of twenty alternative ideas is great for screen-free week. It's also a great reminder of things we could enjoy if we're shopping and spending less - and maybe working less and enjoying life more.