What do they think about these mathematic equations below?
What’s the major difference between the 2 “similar” equation?

Income – Saving = Expenses

Income – Expenses = Saving

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 and investing 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.

Set your priority right and you’ll be on your way to financial freedom.


Personal finance author and trainer

    14 replies to "Income – Saving = Expenses"

    • […] More article about wealth accumulation: 3 elements of Wealth Accumulation Do you qualify to save? Income – Saving = Expenses […]

    • Christine Yong

      I think the approaches to saving and/or spending are what really matters.

      Of course some people will choose to spend first just because they are indebted to somebody else (ie pay back loan)

      I personally think of saving first and pay off education loan at the same time, and not spending beyond your mean, if you know how to plan your budget well

      • KCLau

        good point @Christine. You are good at planning your own finances.

    • Andy

      I think I have the simplest (probably not so effective) saving method. I only spend what I think is necessary and worth the money. If the Starbuck coffee that I spend make me happy, then I would think is worth to spend. Anyway, I hardly drink Starbuck coffee. Saving is a natural thing and you will save more when your income increases and yet your lifestyle has not much different. Oh ya, your lifestyle definitely will change a bit when your income increases. Money if is not for spending is just a piece of paper or a useless figure. Just make sure you can afford it and have enough saving for current and future expenses. Cheers!

    • Kenny Ng

      For one to be achieve financial freedom and wealthy certainly needs a lot of self discipline. Delay gratification. Always ask your self whenever you have the urge to spend on buying something whether it is a “must have” or “nice to have”. Leverage on opportunity to invest in a diversify manner i.e. invest in property, good company stocks which can generate good capital appreciation, high dividend yield, bonds, unit trust or participate in joint business partnerships which can generate profit on your investment.

      Learn how to treasure and value money as we all know it is not easy to earn decent money even though one could be an investor of a businessman. Additionally, never spend lavishly or worst still using future money. Having good attributes and discipline will enable you to save money and invest using your savings to grow your wealth.

    • Steve

      I am one of those disciplined enough to walk the talk. Have been saving all my life even before I started work. Have been investing regularly as well. I was practicing what Robert Kiyosaki was preaching way before he even wrote his first book. I am not a fan of Kiyosaki, nor do I agree with his work as there are numerous bad advice which he dispenses in his book. Read between the lines and each time you see him release a new book/video/course it is about a new investment (that he had already invested in) which will end eventually up a being a bubble – housing, gold, silver, etc. I prefer to stick to traditional methods of getting wealthy – save and invest regularly and live way below your means. Try reading this book – The Millionaire Next Door – plenty of good examples and wisdom here. Do yourself a favour by throwing away Kiyosaki’s book. If you follow his advice blindly, you will end up none the wiser …. and poorer still. Only he is getting richer from you buying his stuff. 🙂

    • casey

      i read in robert kiyosaki book and it says that pay urself 1st. mind to explain what does that mean?

    • Sayeed

      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…

    • Gerald

      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.

    • Will

      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.

      • KCLau

        Hi Will,

        Maybe you can share with us some information about NLP. I believe that it will be very useful to the readers.

    • Precint88

      To save first consistently requires elements of descipline and will power.

      • Wilson

        Disagree, this is a habit 😀

    • Relax

      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. 🙂

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