This is sound saving advice that would enable anyone to save a little each time they earn some money only if it can be followed. Before you start budgeting, a set percentage of your earnings go straight into your savings account. The remaining 80% or 90% will be used for everything else. While it can be hard especially if you have to make budget cuts it's a necessary adjustment if you want a financial [safety] cushion for the rainy days.
Great advice! When I used to work for a company with a decent salary, every time I receive my hard earned money I would go to my bank first and deposit a bigger percentage of my earnings. Then I use what's left for budgeting my daily needs and expenses. It is very important to always set aside part of your regular income into savings because it helps assure you that you would have something to use in case of emergency.
I do this, and give myself a certain amount of money each month to spend - with the rest of it going straight into savings so that I know I can't be wasting it. I know that I waste far too much money if I don't do this, so it makes for me to make sure that there is plenty of money put to one side for what I am saving up for. If we all did this, there would be much fewer people with money troubles in the world!
This is what we are taught to do but when the money does not go far enough to cover your basic needs it does get very hard to do. You can only cut back so much. Right now I pay myself after I have paid my tithe to church. It has been working good for me.
It's a great principle to live by. It's harder to apply in a world of freelance and contract work, but it's really about having a discipline that works for you and considers your future. That way you are being consciously thinking beyond the current day-to-day existence and are planning for what you want to do in the future.
The savings rate in America is pretty anemic, but it's better than most advanced countries. I try and save as much as I can. Ideally, you should save 20% of your earnings. In order to prepare for unexpected emergencies and for the future. But yes, it's a good idea to invest in yourself first, and set aside some money as soon as you get paid, so you are not tempted to spend it.
Sounds like a very good idea, but it's hard to do I believe when you got expenses to pay and you don't have enough any way for living right now. My Mother had a pension fund and it helped her when she was working, so it's a good idea to save a little for yourself even if you don't have enough to live on anyway. It wan't easy for the pension was taken out directly every pay check and she lived in a very tight budget too, so it's worthwhile taking a little out for yourself for that day you'll need the money.
I have never done that. I always pay my bills first and it seems that after the bills are paid I have nothing left. Somehow, I always have money left to buy food but many times it use to be because I was robbing from Peter to pay Paul and the cycle continued. Now I am more aware of my spending habits and I am able to make extra money on the side to help balance the bills along with some financial peace. I hope Postloop allows for some extra spending room to even if it's just lunch.
I agree but more than just establishing how much of your income should go to your savings, it's just as important to stick to your savings plan. Do not skip a month without saving anything from your earnings. Many people try to put off their savings to next month and then the next until a year has passed and they haven't saved anything for real.
Great advice, I'm glad that there are other people in the world who understands the concept of "being rich" as it doesn't necessarily mean that you have lots of money, but it means that you always have as much as you need no matter the situation. There were times in my life when I wish someone would've taught me this principle, of spending less than what you earn, of setting a fixed percent away for the rainy days, it would've simply saved me from the shame of going to others to borrow some money, and have them ask all kind of irritant questions, like where are my money and how did I spent them all.
Auto-transfers can be your best friend. If you can set it up with your employer to distribute paychecks to different bank accounts, then you can automatically, "pay yourself first." One of my favorite books that goes into depth about this idea is the Richest Man in Babylon, which discusses the importance of paying yourself first.
