Pay yourself first, then live within or below your means! That is the ultimate tip.
1. It just means that every time you receive your allowance or income, you immediately allocate a portion thereof to your savings.
There is no hard and fast rule on what percentage of your allowance/income should you allocate for savings. You can even start with just 1% or 2% of your allowance/income, but you have to save consistently and regularly until it becomes your habit. No buts, no ifs, no don'ts.
2. Whatever is left from your allowance/income, you allocate it to your expenses ---your budget for expenses. Then, you have to "live within your means". Meaning, you adjust your spending to make everything fit to your budget; this actually compels you to observe yourself and be mindful of the prices of goods you are spending on.
Once it becomes your habit to Pay Yourself First, that is the time that you can (gradually or drastically) increase the percentage of your savings allocation because you already have insights about your spending tendencies or habit, like you are now able to identify what expenses are dispensable. You may reallocate some of your funds from the expenses side to the savings side as you please.
With your hard-earned savings, you are now in a position to explore investment opportunities!
2 comments:
I agree. Yet I also admit that this is easier said than done! Good luck to us. ��
Yes, agree! But once it becomes your habit, it would be like muscle memory.
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