Saving money starts with good habits and routine. Track you monthly outgoings, set some money aside, plan for what you want to achieve in life and save for your retirement. Here are some of the main principles of saving money:
Spend less than you earn
It’s obvious but that’s the most important element of saving money. That’s how Warren Buffett, Bill Gates and all other rich people build their wealth. Good financial management starts with spending less than your weekly or monthly income. It also causes less stress as you don’t need to worry about your mortgage, bills and other monthly expenses anymore. You will also automatically start saving money for unexpected costs, like a medical expense.
Spending less than you earn applies to rich people as well as poor people. If you’ve build up wealth, the risk is you will lose all that wealth if you spend more than you earn. On this page we give you plenty of tips on how to save money, live frugally and start building wealth.
Start saving as soon as you can
It doesn’t matter if you plan to retire early or not, start saving money as soon as you can. Set up a savings plan and get going. You can use those savings to start investing. There’s a magic thing called compound interest, meaning you have enough money working for you through interest and investments, you no longer need to work for the money. And because the interest and earnings can grow exponentially, you should start investing (and saving) as soon as possible.
Save first, then spend
Get start with whatever you can save, it doesn’t matter how much that is. Better to save something than nothing. Another mistake people make it to first spend money and then try to save what’s left over. It should be the other way around, start a financial plan and see what you can save for yourself.
Saving money is difficult. When you’re poor it can be a challenge to find any saving, when you get richer it can be hard to not increase your spendings and adjust to a new and more expensive lifestyle. Put in some effort to start saving and stay disciplined as you get richer.