Today, I will keep it simple, hoping to inspire you to make an exceptional impact on the size of your savings abilities.

The first concept I will discuss is based on a movie I saw recently, called “The Secret.” This book-turned-movie has been a huge success due to its relatively simple concept of the law of attraction and that which you focus your mind on most tends to develop most in your life. Don’t expect an Oscar-caliber film here, but the basis is not only metaphorical to this column (Keeping it Simple) it deals with a spiritual element that, in my belief, if subscribed to, you will be rewarded for knowing the Secret.

Allow me to explain.

When I focused on my debt, I would notice how it kept right on growing. I would notice bills piling up and while trying to keep my head above water, I could taste the salty water attempting to drown my aspirations. Furthermore, when I focused on relationships in demise, they would continue to swell around me, suffocating the chances of me finding relationships that were rewarding to all parties involved. But when I decided it was time to make money, it was time to advance my career and forget about debt (ok, I didn’t totally forget about it, but I still have some, namely student loans and mortgage, which I don’t really call debt because they get me tax-deductions) I made a concerted effort to make money, and guess what?

This is where your mind is probably trying to talk you out of believing what you are going to read next because you are in severe debt or don’t believe in that spiritual crap.

That’s right, I started to make a lot of money, my debt shrunk and I accepted a position with a college that teaches me more about college planning than I could pay for while paying me an excessive amount of money to learn about college planning.

Many clients tell me that it makes no sense to them to pay a savings vehicle that has no guarantees (or if it does, it doesn’t keep pace with inflation) when their debt is accruing at 18%. I understand this concept. But ask yourself why you got into debt in the first place. I would boil the reasons down to two: Poor planning or Life Happening (which the former is typically disguised in the form of the latter, but nevertheless). Poor planning is the American Way. We want something we see and because that credit card is so easy to apply for, get accepted for and even easier to use, we rack up the debt and worry about the situation later (if at all). Life Happening is the label most like to use when they hate to admit they didn’t plan properly. Like my friends who smoke and drink hundreds of dollars worth each month and say they simply can’t afford the health insurance their work offers to co-opt. When they get in an accident (probably because they drank too much), they get into debt, complain that the government should pay for them and then wonder why they spend years and years paying for the debt they’ve accumulated! Then the cycle of debt begins — or continues — and we’re in deep doo-doo. The cycle of debt is simply delving into debt, paying month-by-month to get out and right as we get out (or sometimes even before) we reward ourselves with another large purchase or “Life-Happens” (again) and we get right back on the cycle.

Stop waiting for life to come at you and take it by the horns.

If you follow this simple formula for saving, you will not only be rewarded by the spiritual law of attraction, but you will also get yourself out of the nasty “buy-now-pay-later” habits. The cycle of debt that most face due to the aforementioned will be a thing of the past.

Open six accounts (or buy six glass/plastic jars and start really simple) and label them as follows:

1. Financial Freedom
2. Long-Term Savings and Spending
3. Education
4. Needs/Necessities
5. Play
6. Give

In Account #1, the Financial Freedom account, you are first to put 10% of all your net income. You should be your most important bill and saving for you should now be priority #1. Remember, spiritually speaking, you will be rewarded by the Universe if you play along. Furthermore, this account shall never, never, NEVER be spent. When should this account be spent?

NEVER!

Did he really say NEVER? Yes! You will never spend the monies you place in this account. Its sole purpose is to earn passive income for you and your family. The principle is never, NEVER touched so as to collect the highest amount of interest possible. The younger you are, the more aggressively this should be invested. It is wise to place these monies in a tax-shelter, i.e. IRA, 401(k), annuity, etc. While there are contribution limits to the IRA and 401(k), often incomes will not be large enough to surpass the 401(k) limits of $15,500. If it is, look into opening an annuity. When you pass away, this account(s) should be passed on accordingly with the express written instructions to never be spent. The passive income it generates should be used to help a family member or, even more effectively, used for a charity of your choice.

The second account is the Long-Term Savings and Spending Account. This should also take up 10% of your net income; however, this can be spent. On? Silly, what does the account specify? Long-Term purposes. Should you want to go on a nice vacation, buy a car, big screen TV or whatever, this account’s purpose will be fulfilled. Remember, you don’t go into debt anymore; rewarding yourself requires discipline. Take this to heart and your long-term goals will be paid for.

The third account is for education. This is not for student loans. By education, I mean 10% of your net income is saved for any course, forum, seminar, class, tutorial, round table discussion, or lessons that enhance, expose, advance, liberate or challenge your thinking to a higher degree. Education is not considered dropping $10 on the latest Lindsay Lohan movie so that you can stay educated on pop culture. This account should take one dollar for every ten you earn (post-tax) and be saved to pay, in-full (or at least a major chunk), for the cost of your educational goals.

The fourth account is for your needs/necessities. Needs and necessities can be determined by what it takes to survive and this account should make up 50-55% of your net income (I’ll explain how you differentiate later). This does NOT include Starbucks every morning because you can’t seem to get to work on time without it. You have to meticulously determine what is needed (like food from a grocery store or the garden and not a restaurant) and what you can go without. Needs could include rent/mortgage, health insurance and/or electricity/gas bills. Nowadays, a mobile phone is determined to be a “need.” While I disagree, the difference of $50-100 per month must be considered should you be putting off the Financial Freedom account because you “just can’t” go without your phone.

The fifth account is a must (ok, all the accounts are a must, but many find a contradiction with this one, so please read on). Although many clients I have worked with often convolute needs and necessities with this account, you must make your own determination based on your integrity to truly enjoy this concept and have fun in this savings game. This account can be called your “Play” account. A Play account is indicative that life should be enjoyed and people should have fun with their money. Once per month, bi-monthly or quarterly, you are to spend the money from this account (if you wait any longer, it becomes a “Long-Term Savings account”) on something one would consider frivolous. Although I’ve used the monies in my Play account for a massage, going to the beach for the weekend, or buying a $400 pair of jeans (yes, I know, that is frivolous, but I am gay). Just splurge and enjoy it for the time being. Enjoy it so much that you want to do it again and again and again. But be disciplined and you will reap the rewards you so desire. And you will do it in a way that inspires others to do so too. It should be mentioned that having fun is a point of life and I suggest that you never sacrifice your sense of humor, love for fun or just plain silliness so that you can be rich (unless you have no humor and you find making money fun, so the combo could be silly).

The final account is one that took me a bit of getting used to and now I love it more than any other. This account is titled “Give.” What might this one be for? Well, I will tell you. Givers gain and the gaining that is given gains more and you can’t gain unless you give so give some more. Although I just made that up, it sounded pretty cool and it carries a great point. According to Deepak Chopra from his book on the “Seven Spiritual Laws of Success”:

“The universe operates through dynamic exchange…giving and receiving are different aspects of the flow of energy in the universe. And in our willingness to give that which we seek, we keep the abundance of the universe circulating in our lives.”

The percentage of your net income that should be placed in this account and given on a monthly, quarterly or semi-annually basis is between 5-10%. Based on your beliefs and what your needs/necessities require, I would suggest you maintain a guideline of a predetermined percentage and stick to it. Give from the heart; give to worthy candidates (this does not mean the able-bodied man holding the cardboard sign he cleverly scribed so as to pull at your heartstrings) and give continuously. Paying it forward is a concept that will get you back.

I often speak with a passionate, yet tough-love tone. I know I can communicate those emotions in writing as well. I do my best to serve my community in this manner as well. I encourage your comments, both on your thoughts of this piece, but also down the road, should you take on this formula. I mean what I write when I state that there are laws to this and should be followed for a truly inspiring life filled with the financial security it takes to fulfill that life. I wish you the best in your financial endeavors.

Marc