Principle #1 Spend less than you earn
One of the most important personal finance principles is to spend less that you earn. No matter how much you earn, if you spend all of it as soon as it lands in your account, you will be stuck in the perpetual payday-to-payday cycle. Making sure that your monthly expenses are less than your income is the only way to ensure that you have something saved for the future.
Although you should save as much as possible, most personal finance experts recommend aiming to save at least 20 per cent of your income. The best way to ensure that you spend less than you earn is by creating a budget and sticking to it. You can use a budgeting app if you don’t know where to start.
Principle #2 Earn more to save more
You can start saving with your current income, no matter how little. However, to boost your saving rate, you actually need to earn more money. The amount of money you can save through budgeting and saving is limited, but there’s no ceiling to the amount of money you can earn.
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