In common usage, saving generally means putting money aside, for example, by putting money in the bank or investing in a pension plan. In a broader sense, saving is typically used to refer to economizing, cutting costs, or to rescuing someone or something. In terms of personal finance, saving refers to preserving money for future use – typically by putting it on deposit – this is distinct from investment where there is an element of risk.

Financial freedom comes to the person who saves at least ten percent or more of his income throughout his lifetime. One of the smartest things that you can ever do for yourself is to develop the habit of saving part of your salary, every single month. Individuals, families and even societies are stable and prosperous to the degree to which they have high savings rates. Savings today are what guarantee the security and the possibilities of tomorrow.

The first consequence of the Law of Saving comes from the book The Richest Man in Babylon by George Classon. It is to “Pay yourself first.”

Begin today to save ten percent of your earnings, and never touch it. This is your fund for long-term financial accumulation and you never use it for any other reason except to assure your financial future.

The remarkable thing is that when you pay yourself first, and force yourself to live on the other ninety percent, you will soon become used to it. You’re a creature of habit. When you regularly put away ten percent of your earnings, you soon become comfortable living on the other ninety percent. Many people start by saving ten percent of their income and then graduate to saving fifteen percent, twenty percent, and even more. And their financial lives change dramatically as a result. So will yours.

The second outcome of the Law of Saving says, “Take advantage of tax deferred savings and investment plans.” Because of high and even multiple tax rates, money that is saved or invested without being taxed accumulates at a rate of 30% to 40% faster than money that is subject to taxation. Self-made millionaires, according to Dr Thomas Stanley’s book The Millionaire Next Door, are almost obsessive about accumulating their funds in assets such as real estate, self owned businesses and equities that increase in value without triggering tax liabilities.

Invest in company pension and retirement plans , stock option programs and whatever else has been approved by your government for long term financial accumulation. Make every dollar count!
Here’s two practicle things you can do to apply this law immediately:

First, begin today to put away ten percent of your earnings. Set up a special account for this purpose and treat your contributions to this account with the same respect that you do your rent or mortgage payments each month.

Second, become a lifelong student of money. Read the best books, take courses and subscribe to the most helpful magazines. Know what you are doing so you can always make intelligent decisions when you invest your funds.

Related posts:

1. Tips to Managing Student Finances

Money Management

Now that you’re on your own at varsity, you might be tempted to spend your money on the things your parents wouldn’t let you have. Take it easy. If you play it smart, you can avoid the sort of money troubles that plague many young adults.

• Pay your tithe. The Bible clearly states that the more you give, the more you will receive. This is a divine principle – which really works! It is important to return tithe with a willing heart and God will pour out His blessings on you. I have experienced this personally and have been bless abundantly as a result.
• Don’t get a credit card and avoid non-academic debt. Rather focus on developing money skills with cash. Worry about credit later.
• Pay your bills as they arrive, then you won’t forget about them.

Organization and Planning

Minimal organization will keep your finances in order. Each of these is an important financial skill:

• Track your spending. Good records will prevent you from getting overdrawn at the bank or exceeding your credit limit.
• Create a budget and stick to it. At the beginning of the month, estimate how much money you’ll receive and then decide where it needs to go. Start saving about 10% of what you earn and you will be amazed at how far the 90% can go.
• Save your receipts. Put them in a shoebox under your bed if you must, but hold onto them. You’ll need to be able to compare them with statements to help track your spending.

Campus Life

It seems like there are countless things competing for your money. It’s hard to know what to do. Here are some smart ways to save money on campus.

• Buy used textbooks. You’re going to sell most of them at the end of the semester. Just keep the ones you really need.
• Live without a car. Learn to use mass/public transport. Find a friend who has a car.
• Don’t hang out with big spenders. Some kids have parents with deep pockets. Hanging out with them can lead you to spend more than you can afford.
• Take advantage of campus activities. Attend free movie festivals. Pay a few bucks to see the symphony every month. Attend campus functions. Get the most out of your student ID!

Decision making and Making Money

Get into the habit of making smart choices now and you’ll develop a pattern of behaviour that will stand you in good stead for the rest of your life.

• When you want to buy something, ask yourself, “Do I NEED it?” Don’t buy on impulse.
• Spend less that you earn. Don’t earn much? Then don’t spend much.
• Learn to invest. Start making regular investments.

Related posts:

1. 7 Tips to Being a Great Conversationalist
2. The Law of Saving