I like to ask my friends what do they think about the mathematic equations above?
What’s the major difference between the 2 “similar” equation?
The answer is: what is the priority? spending or saving?
If your priority is to spend first, then only to save what’s left, it is most likely expenses>savings
If your priority is to save first, then only spend what’s left , it is most likely savings>expenses
Majority of wealthy people are the 2nd type. Saving is their priority!
If you find it difficult to delay your gratification, please engage some system to help you, such as EPF, endowment insurance plan or standing instruction on unit trust purchase. We can even ask our mom to save for us.
{ 7 comments… read them below or add one }
the worst is when someone has to pay debt first every time he gets his salary. Money flies away.
I think one should decrease expenses as much as possible even after the money is put aside for saving.
I think I tend to be a bit aggressive.
To save first consistently requires elements of descipline and will power.
If you find it difficult to delay your gratification, please engage some system to help you, such as EPF, endowment insurance plan or standing instruction on unit trust purchase. We can even ask our mom to save for us.
The above solutions are only some temporary solutions. If you want to have permanent solution, learn to do NLP – change your mindset.
Raising Your Financial IQ, Be Your Own Financial Advisor and Achieving Your Financial Abundance.
Hi Will,
Maybe you can share with us some information about NLP. I believe that it will be very useful to the readers.
Really interesting KC. I agree and I would advise that we pay ourselves first a certain percentage (depending on affordability) and then make all payments. Saving and investing is crucial and most of the time, we need people like you KC to educate us. Thank you.
Well, obviously it required a hell lot of discipline in the beginning for my wife and me, when we start saving $50-100, we were excited and go for a dinner worth that $$,so back to 0.
The only way we manage to do it was to have an account in a separate bank without an ATM card, so withdrawal only with book. Then as my wife is not a banking and red tape person, as i does all the banking and administrative job, the account was under her name. That was STEP 1.
Step 2 : in our monthly account statement – STEP 0 is having a monthly income statement accounting process. (in – expenses = saving) at first.
Step 3 : set aside a % of saving and automatic standing instruction from my salary direct to that saving accounts. (in – saving = expenses)
Step 4 : gradually go up from maybe 3%….5%….10% and today we are saving 30+%.
Note; you need to know details of your accounts…happy trying…
i read in robert kiyosaki book and it says that pay urself 1st. mind to explain what does that mean?