This is how I look at savings – that every work you ever did and were paid for, you should have a remnant of it with you today.
There should be something in hard cash or an asset to show for it. Because if it is not there, then did you ever work at all? What shows? Look at savings as an attendance list, a signature, or a voucher.
When you look behind you and you can see the evidence of your work, you are much more encouraged to work harder. If it always looks like you have nothing behind you; that the ground behind you is always not tilled, it can be a very discouraging.
The suffocating loop of having everything one day and nothing at all the next, and the deep insecurity that comes from worrying about where your next money will come from will end when you set aside just 10% of your earnings. There is no fixed figure to save. Just a percentage.
So, if you earn:
1,000,000 you set aside 100,000
500,000 you set aside 50,000
200,000 you set aside 20,000
10,000 you set aside 1,000
It really is this simple.
If you think that 20,000 is too little to save, think about this: at the end of one year of doing this, you will have 240,000 -which is better than having nothing at all. Yes, 240,000 might appear small but relative to your salary of 200,000 it is a whole lot. Do not forget that increasing income is a function of time.
If you earn 200,000 today as a twenty three year old, surely by thirty, you will not still be earning 200,000. The principle behind saving is that you build the habit of setting aside a portion of your earnings now! Not today, or tomorrow, but now.
This habit guarantees that when you finally start to earn more, you already have the habit in place. If you can not save 20,000 off of your 200,000 you can be sure that you will not save 500,000 off of 5 million. Why would you? Nothing within you changed. It will be different money, yes, but being managed by the same money mind and hands.
Fix the money management tools first (your heart, mind and hands), then watch the money grow when it comes to you. You can start your financial growth journey by watching this video which expounds on the concept of setting aside an income, and subjecting it to the growing power of compounding interest and time.
