Saving is the first step towards financial independence followed by investment. If you are a person who believes in spending all your earnings to buy luxuries then you should sit down and reflect on what you would do when you are old enough that you can’t go to work? You would live a life at the mercy of your children or some other person. But do you not believe in living a life of dignity or respect which I’m again and again repeat these words in my various articles as I know what it means to live a life without respect. I have seen many people whom I know die like they were not humans because they hoped their children would take care of them.
“Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow And the more faithfully you nourish and water that tree with consistent savings, the sooner may you bask in contentment beneath its shade.” ― George S. Clason, The Richest Man in Babylon
But don’t get me wrong, I didn’t mean that you should not enjoy your wealth. If that’s the case then why the hell on the earth we should bother to earn money if we can’t enjoy it. All I am saying is that you should reflect on what is essential and what is the wastage of the money on unnecessary items which costs a lot to us?
Always, Saving > Spends
I would like to mention a great movie on the same topic which I watched in my childhood – “Aamdani Atthanni Kharcha Rupaiya (आमदनी अठन्नी खर्चा रुपइया)”. It means earning ₹50 paise and spending ₹1. In this movie, some families earn less than what they spend and due to this, they have to face a lot of challenges in their life. But the hero of this movie taught them how to earn more and spend less so that they can live a happy life. I know that if you are not earning well or there is a lack of money in your house then you will face family troubles, sometimes these things would cause fights and other marital issues in your family. Believe me, I have seen the odd faces of this life and I don’t want you to see these issues in your life.
I have met many people including some of my college friends who have bought expensive devices such as phones, watches, etc on the loan while their earnings were very less. In reality, they could not afford these items if they had to buy with their own money. But since it was the bank’s money which you have to pay in small EMI you didn’t calculate how much you have paid in the end to the bank. You are making banks richer while you are going poorer. And why all this thing? Just to show off to others who don’t care.
Record Expenses
In one of our articles, I have mentioned how important it is to record your expenses so that you would come to know where you are unnecessarily spending money. It could be shopping, restaurants, etc. you have to find yourself what is essential and what is not to correct those faults in your finances. For example – I noticed that most of my expenses were on online shopping when products were on discounts, I bought those products thinking that I am saving money as the product will cost more on normal days but in reality, the product was not essential. After buying it, I would not remember what I would do with this? So, buy only those products which are required not because it is available for a discount. By doing this you will save a lot of money in the end and also peace of mind.
Start making a good habit of saving as early as possible in your life and record the expenses to control bad expenses. A very famous book – ‘Rich Dad Poor Dad’ suggests that you should “pay yourself first”. What does this mean? Well the answer is you should take some portion of your income and then what is left should be spent but we do the thing in reverse. We don’t pay ourselves first. We pay for utilities, EMI, etc and after spending, if something is left then that is our savings. I know you must pay all your dues otherwise, it will be chaos. But once you start paying yourself first then all of a sudden your expenses will start to reduce. Because you know we have a habit of buying things on loan and then we are liable to pay EMI to the banks first. You will be a second receiver of the money while your bank is the first.
So, You should be doing —- Income – Savings = Expenses
Instead of — Income – Expenses = Savings
And if you change only that little in your life, you will start noticing a huge change. Later on, we will discuss the next step which is growing our savings. Till then start saving from today and keep a record of your expenses. I have also uploaded an excel sheet which is very useful to record your expenses. You can get access from here. See you soon!
