Friday, September 26, 2014 5:14 PM / Research
This is the most basic rule of growing wealth, the only way to grow wealth is to find a strategy to have surplus of money. Spend less than you earn is a simple and clear strategy to employ.
Just as we have highlighted in our recent article titled ‘Debt Tricks, Syndrome and Key Tips’ that spending less than what you earn is number one rule for debt control- the same rule is very important in growing wealth. This is the reason we found it more necessary and compelling to do a special article on the concept of 'spend less than you earn'.
In this regard, you will agree with us that spending more than you earn monthly is actually not sustainable- if you are really interested in growing your net worth, you must learn or cultivate the habit of spending less than you earn.
This concept highlights the need and importance of frugality, which with no doubt would have a great impact on your overspending culture. Overspending, according to Wikipedia is spending more money than one can afford, which is financially dangerous to your wellbeing. This reinforces the fact that when you shrink your expenses, you are definitely boosting your cash flow.
Though, some people may prefer to focus on how to keep increasing income and ignore frugality, which means they will spend more and ready to earn more- with this approach, the tendency to go broke is still high. The simple formula to growing wealth is WEALTH = EARN MORE - SPEND LESS.
This shows frugality is important, and for you to make progress, it is advisable you take conscious effort to increase your income as you are strategizing or learning how to spend less than you earn. Just as we have said in one of our articles , you must do something to boost your income.
With this article, we intend to reveal the importance of ‘spend less than you earn’ and also highlight some key tips on how you can achieve this and leave within your budget. Below are summarized tips and ideas you can employ to practice the concept of ‘spend less than you earn’.
•Just as we have noted above, you need to practice frugality;
•You need to stop acting like you have enough in the bank;
•Start living within your means- it is one of the simple practical ways to growing wealth;
•Avoid debt, learn the habit of saving and investing;
•Be value conscious, avoid buying flashy things. Buy your needs and your wants;
•Wise spending, learn how to spend with the expectation to gain profitable returns;
•Buy a modest car, a car that will get you to your destination safely and comfortably should be your concern;
•Employ passive ways to bring in more money and maintain your current lifestyle.
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