Saving money the easy way

May 5, 2009


Income < expenditure = debt
Income > expenditure = savings

Simple to say but harder to live by. The easiest way to try to make this a reality, is to always imagine you make less money than you actually do. If you have an income of £15k then spend your money as if you actually make £12k, then save the rest or pay off debts with it. The less debts you have, the less interest there will be to pay, and so you will have even more money to play with.

It may seem like a difficult thing to do, but it is not really that hard when you recognise the fact that whenever you receive a pay rise, finances never really appear to significantly improve. Spending simply adjusts to meet the new income level. Set up a direct debit so that as soon as you get paid, some money goes straight into a separate savings account. As you don’t view it in your current account, you will not see it as available to spend, and so your savings will gradually increase with no real effort or hardship on your part.

If you can manage to live below your income in this manner, then making important financial changes becomes much easier.


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