The most important indicator on whether you are building wealth or heading towards financial disaster is whether you save every month. In other words, you should spend less than you earn. Or even better, earn more than you spend.
Here’s one effective way to make sure that you have money saved up every month. Pay yourself first!
Pay Yourself First
Every month, pay your most loyal and hardworking employee first. YOU. The moment you receive your pay, set aside an amount to put into another account where you cannot touch.
Decide how much you will pay yourself. It can be a percentage (10-20%) or a fixed figure (RM100, RM500 or RM1000).
If your salary is RM3000/mth, you can decide to pay yourself RM300 (10%) every month.
You can set up an automatic transfer for your funds every month so it automatically gets transferred. Or you can just withdraw the money and put it in a jar or envelope.
Set a goal & track your progress on how much you are saving.
Decide what you want to do with your savings. Do you want to build up an emergency fund, put it into investment, buy a house?
To find out what you should be doing with your savings depending on your age, check out our financial planning checklist
TL;DR: After paying off necessities, save before spending money on things you don’t really need.
