Want to build wealth faster? The formula is very simple; save and spend less! While this is easy to say that implement, some of the richest people in the world have climbed to the top by applying it. In this post, we bring you simple money saving tips that will help to build wealth faster.
Automate the monthly saving
Automating your finances helps to make everything easy, faster and fun. By automating the finances, the money that goes to savings will always be remitted on time, and you will never skip a deduction. For example, you can ask your bank, HR or accounts department at work to remit a portion of the earning directly to the investment/ saving account. Automation helps you to save in the following two ways;
- Because you do not even see the cash, there will be no temptation to redirect the cash.
- Your budgeting will get used to the cash that remains in the account after saving has been remitted.
Create new sources of revenue and channel the cash to the saving account
Many are the experts who recount how their double streams of revenue helped them build massive investments. A media personality who also runs comedy gigs can opt to save the money from the second stream to build his saving. However, this does not mean that you must have a big job to create new streams of revenue. Look at your lifestyle to identify areas of interest that you can get involved in to generate additional revenue. Some great examples include;
- Consider online jobs after work that requires you to work a few hours every day.
- Lend the dad’s car to a car hire company and use the wife’s car for daily commuting to work.
- Start a baking shop and have one of the members of the family operating it.
- Redesign one of the rooms by building an extension for renting.
The more you look at your lifestyle, the more the opportunities for generating streams of revenue.
Utilize the 50/30/20 saving rule
In many cases, the formula that you use for budgeting determines the success of the money saving effort. Though there are many formulae out there, one of the most effective is the 50/30/20 save rule. This rule means that 50% of the revenue goes directly to the saving, emergency, or checking account while 30% is used for personal lifestyle. The last 20% is reserved for fun but can always be altered to cater for shortfalls in personal lifestyle. Once you have developed the saving trend of at least 50%, it will accumulate fast and help you match to financial freedom.
Involve the entire family to build savings
While this remains a highly controversial consideration, those who use it reach financial freedom faster and enjoy every moment of their lives. If your spouse is working, share the expenses and contribute to the savings account together. As opposed to working alone which would require ten years of saving before buying a new house, a hand from your wife will make the dream a reality in just a few years. Remember that such a plan might require a legally abiding agreement to ensure that all parties are comfortable and identify fully with the outcome.