Okay, the next section in this particular core lesson on personal finance is saving strategy. What should you be doing with the money that you're saving? And what do you think is the best approach to go about saving your money? So the first question I have for you is, how much should you be saving? And how often do you think you should do it? Once a month, every paycheck once a year, I'd like to introduce you to a quote that I thought had a fair amount of impact my first Reddit and it goes like this.
Poor people spend their money and save what is left rich people save their money and spend what is left. Now it might seem obvious that this is an important thing to do. It's unfortunate that people will go ahead and spend their money and then won't really consider saving until they've gone through all of their expenses. And quite often, there's nothing really left over because people tend to live or spend at their means. above their means, which means people will usually spend as much money as they have, or even spend more money than they have, which is through the use of credit cards. However, what you really want to be doing is saving money first.
And then using your personal budget, you'll be able to spend what is left over on the necessary items, and then possibly on other items that are more for fun and entertainment. So take the advice of the rich, you want to save your money first, and then spend what's left over. So let's go back to the five rules of gold in the book, The Richest Man in Babylon. Earlier, I asked you to try and guess what does pay yourself first really mean? The first law out of the five rules of gold goes like this. Save no less than 10% of your income.
Put it away before You pay any expense. What that means is on payday very moment, the very day that you get paid from your job, take 10% minimum and put it into a savings account or put it somewhere that you will not touch it, or better yet cannot touch it. Make note, do not ever pay bills or other expenses. First, it might seem impossible to do for some people, because they think they can't afford it. However, everyone is able to fairly easily adjust to living with a little less each month and you will be so happy to see how quickly your savings increase as a month progress. Kind of an obvious answer to this question.
When should you start saving 10% or more? When should you start paying yourself first? All right. Give yourself a round of applause. You probably guessed now is the best time to start. Now that you have a clear understanding of the first rule of gold.
Pay yourself first. What do you think you should do. How about Take a moment, look at your goals worksheet, and adjust any financial goals, perhaps adjust your savings goals. And now that you know how to use a personal budget, and you have an Excel spreadsheet, maybe keep in mind the line item at the bottom for a personal savings. How much money are you going to contribute to your savings? And next, what should you do with the money you save?
Actually, this is a question that we're going to answer in our next section. But I want you to start thinking of this. What would you do with the money that you save? Did you put it in a piggy bank? Should you put it in a savings account? Should you invest?
We'll answer that question soon. To recap our savings strategy lesson. Now we know more of the importance of having a savings strategy. Remember, don't do what the poor do. Do with the rich to say first spend later Take heed of the first rule of gold. pay yourself first.
And how much what's the minimum you should pay yourself first each time you get income. Make sure it's a minimum of 10%. Okay, that wraps things up. Let's get ready for the next lesson. Investing eye opener