As the idea to start this blog came to mind and I started putting the pieces together of how I wanted the blog to take shape and what I wanted the purpose of the blog to be, I began thinking about what I would make my first post. What money tip should be number one? Almost immediately I thought of the rule to save ten percent of all that you earn. I’m not sure where and when I first learned this rule, but over the years it seems to be brought up in almost every book I read about wealth and money.
I know it is laid out in one of my favorite money books “The Richest Man in Babylon” by George S. Clason. But I also know that I knew of the rule before ever reading that little, magnificent book. Now, I will have to admit, I haven’t always followed the rule. And as simple as the rule seems, I wish someone had told me about it when I first started making money. After you get used to spending, it sometimes gets difficult to carve out 10%. But no one did, so I didn’t.
So, why ten percent? Why not 5 or 20? Why 10? I’m not sure what the ‘experts’ reasons are, but mine boil down to two: it’s easy to calculate and it’s generally enough. Simple. How do you calculate 10%? Well, you simply lop off the last digit of whatever income you have brought in. You got paid $954 this month, you save $95. You made $3,458, you save $345. You sold a used TV for $450, save $45. You don’t have to be exact and save the change. Just be consistent. Every. Single. Time. You get paid.
Now, let’s address reason two--it’s enough. If you will start early, like as soon as you begin making money, and consistently save 10% of all you make, you will be amazed at the amount of money you can accumulate over the course of your money making career. I should probably state here that saving 10% of all you make might not make you rich, whatever that means to you, although it might. But what it will probably do is allow you to retire into a comfortable lifestyle, which the majority of Americans can’t do.
If, like me, you are learning of this simple rule after you have been making money for a while and have gotten into a habit of spending so much that you can’t afford to save 10%, keep coming by the blog for additional advice. You probably need it. In the mean time, do this--take a long, hard look at your expenses. If you can’t afford to save 10%, you really need to start cutting back. Cut out all unnecessary costs until you can put aside 10% into a savings account that you will not touch. If you honestly still can’t afford 10%, start somewhere. Fifty dollars, twenty dollars, five dollars, something. Every little bit is a start in the right direction. Think of it this way, every dollar you save is a money seed that can ultimately turn into a money tree! Later, I will get into what other avenues you can put your money into besides savings accounts.
Your goal this week is to have more money in a savings account, or to start a savings account, than you do right now. So, until next time, save!
