By now, you probably already know that I have a lot of theories. None of them are at all scientific, but I still think that they’re pretty true. Here are a few that I can think off the top of my head: It’s very rare for guys and girls to be real platonic friends. People who hashtag IDGAF actually, in fact, do give a fuck. And white guys can’t tell the difference between good looking Asian girls and ugly Asian girls. And trust me; I can back any of these up for hours minutes on end.

Anyways, I recently came up with a new theory.

Well, it’s not really new, but now I’m applying it to saving money. Based on my extensive experience from being a person, I think it’s safe to say that when something is near perfect, people will more likely put extra effort into keeping it that way, while when something is already shitty, people probably won’t care as much if it gets a bit shittier.

So, let’s assume you’re a pretty financially responsible person. Your paycheck comes. What do you do? You put a little bit of it away in long term investments, put a chunk of it in your savings account, pay off some bills, and the rest goes into your checking or spending account.

Now in an ideal world, the money that you allocated to your spending account from this pay period should last until your next paycheck comes. But realistically, this is often not the case. You got overzealous and spent an extra $100 this month and now you can’t pay your credit card bill off without dipping into your savings. So what do you do? Easy, just pay off that extra $100 with your next paycheck. Why not? It’s well before the due date so you won’t be charged any interest or fees and you don’t want to touch your hard earned savings. Well, that $100 becomes $200 next month, and then $300, and so on and so forth until eventually, you’re paying off last month’s expenses with this month’s spending budget. Meaning, after savings, your entire paycheck this month is going towards last month’s credit card bill.

So? What’s the problem? Your investment and saving accounts are still growing every month and you’re still not wasting any money on interest or fees.

The problem is that even though you’re saving, you’re not living within your means. Little by little, you overspent an entire paycheck. You don’t notice it because there’s always a new one coming in, but you’re actually an entire paycheck behind. Most likely, if you keep up these spending habits, you will be forced to lower the amount of money you are saving every month in order to keep up with these habits you developed.

Let’s go back to my theory about perfect things staying perfect and shitty things getting shittier for a second. Right now, your finances are kind of shitty. You’re basically counting down the days to your next paycheck so you can pay off your credit card bill. More than likely, you will even start counting down the days until the paycheck after that. Your credit card bill is already at $1,500, what’s spending another $25 going to do? What’s another $50 going to do? It’s discouraging to even think about. You don’t even want to check your credit card bill. You know you have enough money to pay it off if it came down to it, so just worry about it later. Your shitty situation just encourages you to make it shittier.

But let’s look at the flipside. Your paycheck just came in, and all your credit card bills are already at zero. Your net worth just grew by whatever your paycheck was and you were able to supplement your investment and saving accounts. Now, all this left over money is for you to spend with a guilt free conscience. Even better, whatever you don’tspend by the time your next payday will just be added to your net worth. Your mind is at ease and since you’re doing so well financially, you love checking your accounts in your free time so you know exactly where you’re at. Your perfect situation remains perfect.

Financially, these two scenarios are identical, but psychologically, they are very different. I really think staying in the second scenario encourages us to spend less and save more and helps reduce financial stress. So how do we get there? Easy! Just take a one-time hit to your savings. When you get your next paycheck, try paying off all of your debts with money from your savings account, and follow scenario two accordingly. I know the first time will feel like all that all of your hard earned savings is going down the drain, but realistically nothing has changed. Just trust me on this one and please, give it a try.

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