To Increase Your Wealth: Ability to Save

Ability to Save

How To Start Saving?

I would like to deep dive about the “Ability to Save” today.

Are you saving a certain amount of money on a regular basis or every month? Are you making any effort in order to increase your savings and wealth?

First of all, in order to increase your wealth, you need to achieve just one thing that is most important.

That is:

That is exactly the first step that you need to accomplish in order to increase your wealth. 

If you can’t make your spending lower than your income, you won’t be able to increase your wealth. 

This principle applies to anyone. Do you agree?

If your total spending currently exceeds your income, you need to achieve one of the followings:

Which option do you think is easier to achieve?

I think most people would agree “Decrease your spending” is easier. 

If it’s difficult to save on a regular basis, why don’t you review what you are spending your money each month?

 

Review Your Monthly Spending

To review what you spend your money every month, let’s start with listing up all your  expenses, and categorize them to “Non Discretionary Expenses” and “Discretionary Expenses”. 

After you list up all the expenses, review if you can lower any of the monthly recurring expenses by looking for cheaper options.  

If you over-spend on expenses for your lifestyles, look for areas you could reduce the frequency.

For example, if you eat out once a week, can you reduce it twice a month instead?

If you eat out lunch on weekdays, can you bring lunch to work for some days?

If you identify items you could reduce every month, put the amount you can reduce into savings. 

 

Make Payment to Yourself First

I know sometimes it may be difficult to continue saving every month, after paying for all the necessities and pleasures such as dining out and going out with friends. 

Occasionally, you may end up skipping the monthly saving.

To make saving a little easier, I suggest you make the monthly savings a priority. That is, making the payment to you first. 

After paying to yourself, you can spend all the leftover for your necessities and pleasures. 

You can make an arrangement so that a certain amount is deposited to a different account as a monthly (or bi-weekly) savings, separately from the account for your living expenses. 

Additionally, you may want to make this separate savings account a little difficult to reach. That way, it will discourage you from withdrawing the money when you want.

I am sure it will make savings a little easier!