(How To Form the Habit You Required to Save More Money)
“The lasting favour you can confer to a child as a parent is helping the child to help him/herself”.
Advising someone to save money without exposing the process to follow to save that money is what I think looks like an elusive statement.
And the uppermost question in the mind of people who do not save is; “how can I do it?”
As someone who finds it difficult to save, you should know that the process of saving money is—- all about habit. For this reason, we are going to start this article with THE LAW OF HABIT.
According to the law of habit, it has been proven that any action or deed performed often, due to the repetition after a particular time becomes a routine and the brain has to be accustomed to it that, you do perform the same action even when you are not told to. Such is INITIATIVE.
Speakers proved this to be true by saying that; by merely telling a story often and on which is based on pure fiction, the mind becomes accustomed to it that you immediately forget that the story was based on fiction and finally start to believe it is true.
WHAT TO DO AND WHAT NOT TO DO IF YOU WANT TO FORM HABIT OF SAVING:
1. DO NOT FIX YOUR MIND TO A GIVEN EARNING CAPACITY:
This will make you not be able to earn more than that, because, the law of habit will set up a definite limitation of the amount you can earn.
2. INCREASE YOUR EARNING POWER:
Set up an accurate, definite description of that which you want, including the amount of money you intend to earn.
This idea will destroy the poverty consciousness and set up a prosperity consciousness.
Definitely, you will begin to demand prosperity, also be expecting it, and finally begin to prepare yourself to receive it and to use it wisely; this will help you pave the way for the development of the habit of saving.
3. MAKE USE OF LAW OF SAVING BY PROVISION:
In your list of definite chief aims that you might have written down, make room for saving a definite proportion of all the money that comes your way.
Note this: As your earnings increase, your savings should increase likewise.
By ever urging yourself and not fixing your mind on a given earning capacity, and by increasing your earning capacity, equally making use of provision by proportion as your earning capacity increases, you will reach the point at which you have removed all imaginary meditation from your mind and will soon be leading to the road toward financial independence.
To prove these three habits of saving principles true, let us reverse the operation of the law of habit with a little illustrative story;
Using magazine publishers as an example, they could create panic in daily business news by filling their bulletin with news about business failures of the country, even though, few businesses are compared with many who succeeded or failed.
Yet, people and the country are worried about the incessant failure of businesses in the country.
The kidnapping saga in nations around the world is another example. The consistent report in one state then, triggered the same pattern of crime in other states.
The so-called “crime waves” are to a large extent the product of sensational journalism. Now, let’s look into debt which is regarded as the fatal enemy of the saving habit.
Debt, a Fatal Enemy Of The Savings Habit.
If you ask me who is the merciless master? I will tell you what DEBT is. It is a fatal enemy of the savings habit.
No man can save or form the habit of saving with heavy debt hanging on his neck, poverty alone is capable of killing off ambition, destroying self-confidence, and destroying hope, then think of when added to it the burden of debt.
All who are victims of these two cruel masters(Debt, and Poverty) are practically doomed to failure.
So, keep in mind that the accumulation of debt is a habit. It starts in a small way and grows until it accumulates to a subduing tendency and you will be heavily indebted.
Many young men start their marriage with heavy debt hanging on their neck, and when the eve of sweet married life continues to wear off then what follows is dissatisfaction and oftentimes divorce.
Then, let’s go into how we can avoid this slave master known as debt.
How To Escape The Slavery Of Debt And Be Able To Form a Habit Of Saving;
(a) Resolve to be no man debtor by thinking of what you owe yourself and those who are dependent upon you— this is the advice of one successful man whose early life and chances were destroyed by debt.
(b) Throw off the habit of buying that which you did not need.
For our information, there are two classes of debt as described below:
i). Dead loss debt (debt incurred for luxuries)
ii). Professional or business trading debt (debt incurred in the course of professional or business trading which represents service that can be converted back into assets)
Note this: The first class of debt is what you should avoid. You may indulge in the second class providing the debtor uses judgment and does not go beyond the bounds of your reasonable limitation.
i.e., be conscious of the type of business career you want to get indebted into. It should be lucrative so that you could be able to pay it back in possible time.
In this article, we started from;
- How to form the habit you require to save more money;
- WHAT TO DO AND WHAT NOT TO DO IF YOU WANT TO FORM HABIT OF SAVING;
- Debt, a fatal enemy of the savings habit;
- Escaping slavery of debt and being able to form the habit of saving;
- Two classes of debt.
I advise you to take time to read and digest this and you will be on your way to forming THE HABIT OF SAVING MORE MONEY. Which is a step to financial success, he who does not save hardly gets rich.
Then,
HOW MUCH MONEY IS ONE EXPECTED TO SAVE?
(Is there a definite amount one should save?)
Having gone through the habit of saving, above, what should come to mind next is how much should one save?
This question could not be answered in a few words because; many conditions determine this, some within our control and some which may not be.
But let us look at a man who works for a salary and how much he should apportion his income as follows: ——-
Savings account……….20%
Living—clothes, food and shelter……….50%
Education……….10%
Recreation……….10%
Life Insurance………10% Total = 100%
However, look at the average man and his approximate distribution and what he actually makes of his income:
Saving………. NOTHING
Living—clothes, food and shelter……….60%
Education……….0%
Recreation……….35%
Life Insurance……….5% Total=100%
Examining the line for recreation at the average man and his approximation, we should come to understand that, under this are many expenditures that do not really recreate, such as money spent for alcoholic drinks, dinner parties and other similar things which may serve to undermine health and destroy character.
Looking at the life of a relation of mine who was a banker but, loved spending more than he is paid.
This young man earns $100.00 per month from a micro-finance bank and spends more than $250.00 monthly by attending many shopping malls with his wife who also was engulfed in this habit of expenditure.
It happened that he made away with $10,000.00 belonging to the bank to meet up with his spending habit and unfortunately was caught in the act and sentenced to prison.
Fortunately for him, his relations came to his rescue and it was demanded he should pay back the money which warrants selling off a piece of land at the price of $20,000.00 to bail him out.
You see! From his outrageous habit, he has wasted a whole lot of money in a bid to satisfy what he called entertainment or recreation expenditure. Let’s examine the supposed expenditure as your family increases.
BELOW IS THE SUPPOSED EXPENDITURE AS YOUR FAMILY INCREASES:
A family of two persons, with an income of $100.00 monthly should budget thus;
Saving = $10.00 or $12.00
Cost of shelter or rent = $25.00 or $30.00
Clothing = $15.00 to $20.00
Recreation = $8. 00 to $10.00
A family with an income of $100.00 monthly should that income be increased to $125.00 should save $20.00 of the amount.
A family of two persons, with an income of $300.00 monthly should budget thus;
Saving = $55.00 or $65.00
Cost of shelter or rent = $45.00 or $60.00
Clothing = $35.00 to $45.00
Recreation and Education= $50. 00 to $75.00
Just as the salary increases, your savings budget should increase in proportion.
But instead of practising this habit of saving, many young men have gone to the extent of purchasing cars before they pay for them.
This has kept them at the slave trade master of debt, difficult for you to break out from because, hence you have formed the habit of buying to be deducted from your salary, it seems sweet and easy but, it leaves no one with the habit of saving at last.
HERE ARE OPPORTUNITIES THAT COME TO THOSE WHO HAVE SAVED MONEY
A few years ago, a young man who worked for a printing press experienced this kind of opportunity. One of his fellow workmen who formed the habit of saving $500.00 a week advised and influenced him to form the same habit too.
Three years later, he was able to save a whole lot of money and the printing company he worked for got into financial difficulty and was about to fail.
He came to the rescue with his savings and in return was given a half interest in the business.
Today he is drawing out of it, as his half of the profits, a little better than $250, 000.00 per year.
Had he not formed the habit of saving, this opportunity would have eluded him.
As we all know, the greatest thing in life is FREEDOM!
And there is no real freedom without a reasonable degree of financial independence.
The only escape from this lack of habit of saving which curtails freedom is to form the habit of saving money, and definitely live up to it in life no matter the level of sacrifice it may require.
Millions of people go through this menace of lack of saving money including me, and unless you are one of the rare exceptions who listen and seek knowledge this lesson and all that is contained here are meant for you, and you have to apply it for it to apply to you.
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