To save money is one of the great habits of successful people and one you should learn.
For me, it is the single most important habit you should have if you want to be financially free.
It is the habit that wealthy men like Warren Buffet, Carlos Slim and a lot of others have lived with all their lives. And you want to be like them, maybe not exactly like them but at least you want to attain a certain level of wealth.
So why must you learn how to save? Because it is what helps you create wealth.
Savings begin your journey to wealth.
The moment you start saving, you have laid the foundation to be financially free in the future.
And the feeling is good when you save. You feel good when you save some part of your income. When you know that the income you earned last month was not all spent but some were saved for the future.
You feel that you are responsible to yourself and to the people around you. It gives you a sense of control.
The feeling is different when you earned an income and spend it all. And sometimes even borrow to finance your spending.
When is the right time to start to save?
Don’t wait till you feel ready before you start saving. That time might never come.
And don’t wait till you start earning millions a month.
If you are not saving when your income is twenty thousand naira, you are likely not going to save when you start earning millions.
Saving instills discipline to your financial life. If you are not nurtured and drilled in the school of savings, no amount of money you earn will ever be enough.
Your expenses will grow as your income grows, giving you no chance to save.
If you are not disciplined, you will remind yourself when your income rises from fifty thousand naira to hundred thousand naira that it’s time to change apartment, am now bigger than this.
You will remind yourself at the time when your income rises from hundred thousand naira to five hundred thousand that it’s time to start building a duplex. Levels don change.
But someone who is financially disciplined, who saves 20% of fifty thousand naira can easily save 40% of hundred thousand naira and can easily save 60% of five hundred thousand naira. And these savings will enable him to create wealth.
It is not that living the good life is not good, but your primary aim when you are saving is to diversify your source of income.
Saving creates wealth and you are not likely to be financially free without it
The more you save, the more you are making more funds available for investments, the more your wealth grows.
Wealth is created through investments and the investible funds made available through savings. If you do not save, how would you take advantage of investment opportunities that come up once in a while?
How Much Is Enough
Some financial experts put the figure at 10%, some at 15% and some 20%. But I agree with the financial experts who advised us to save nothing less than 10% of our income.
I know it is hard for some people to put a figure around their income because they really don’t know what their income is, primarily because of the nature of what they do for a living. This is why you need to take the first step to financial freedom.
Remember the advice, nothing less than 10%. You can save as much as 80% of your income if you can afford it. But do not do savings of below 10% of income. Be very ambiguous with your savings.