For those of you who have read my previous free e-book “70 PUSH UPS FOR SUCCESS”, I explained how to go about this. Do not save after you have spent all your cash or you will be broke. Always try to save before spending, I know it a little bit difficult when you have so many expenses and debts to take care of but you just have to do this.
Do not save what is left after spending but spend what is left after saving. Wealthy people invest first and spend what's left but Broke people spend first and invest what's left. When you get your pay checks or your allowance, please save a portion of it. I advise folks to always save at least 10% of their monthly pay and you will be amazed at what you will get at the end of 5 years.
I told a friend of mine this same principle and wished she had listened to me. One month later she called me and told me that she was broke and needed some money. I asked if she had saved any money by applying the principle I taught her and she said “NO”. She told me that she had started selling some of her properties to raise cash for herself before her parents send her more money. There was nothing I could do because she had missed it from the beginning. But she promised to apply the principle on her next allowance.
Let me show you something. Assuming your monthly pay is about $10,000 and you save 10% of it monthly, that will be $1,000 and you will have $9,000 to yourself. At the end of the year, you will be having $12,000. Let's pretend you kept on applying this principle for the next 5 years or 10 years and after 5 years you must have gotten about $60,000 and after 10 years, you will be having about $120,000 and it's that easy.
If you are a student in Nigeria and your monthly allowance is ₦20,000 and you apply the same principle by saving ₦2,000 every month. At the end of the year, you will be having ₦24,000. Continue like this till you graduate without touching the money and at the end of 5 years, you should have gotten about ₦120,000. It works like magic, from your year 1 to your year 5 you have gotten ₦120,000 which started with ₦2,000.
With the amount you have gotten you can invest in any business of your choice. All what it requires from you is just patience and consistency. You can decide to save more than 10%. I heard of someone who saved 25% of his salary and after 7 years he used the money to start up his own company.
Why not apply this same principle in your finances? There is nothing to lose because it's still your money.
You can choose to open a different bank account to keep your savings or have a small metal safe where you can keep the money. Most of us had metal safes while we were little, saving every penny given to us by Uncles and Aunties who came to visit us. Go back to that principle because if saving money is wrong, then I don't want to be right.
I love the way Will Rogers put it, he said “The quickest way to double your money is to fold it in half and put it in your back pocket”. If you use money you ought to save to buy things you do not need, you will end up selling what you have to get what you need. It's not your salary that makes you rich, it's your spending habits, so you need to beware of little expenses; a small leak will sink a great ship.
Financial peace isn't the acquisition of stuff. It's the learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this and going into debt usually isn't caused by lack of money, it's caused by lack of vision.
Suze Orman said, “if you are worried about job security and do not have an adequate emergency fund (ideally eight months' worthy of living expenses stashed away in a federally insured bank or credit union), you need to focus more on saving money than paying down the balance on your credit card”.
You need to start thinking of the future and not just the present. So know how to spend more wisely. You will win with money when you decide that your family's future is more important than any new toy you want to buy. You need to be in control of your finances.
There is a popular proverb in Jamaica, “Save money and money will save you”. Wealthy people save and plan for 3 Generations but poor people save and plan for Saturday night. A word is enough for the wise.
You can get books that talk about money, saving money and using money to make more money. Being in control of your finances is a great stress reliever.