Education is no doubt a good thing, we spend so much money to acquire formal education to enhance our chances of getting better jobs and earning a good living, but this formal education does not prepare or teach us the tips on how to save money. Which lead to us working so hard with little to nothing to show for it. And it feels like we are running a rat race.
“Running a rat race” is a phrase many of us must have heard, but the real question is do we really know what it means or how to come out of it? For the sake of this article, I will try and define it in the simplest way possible. According to Wikipedia, A rat race is an endless, self-defeating, or pointless pursuit.
You probably might be thinking how does this show us the tips on how to save money. The truth is if you don’t find a way to come out of the rat race you won’t know how to save money. You will just be going in circles.
There are several hardworking people out there, some of these people have degrees and good jobs but still, they don’t know how to save money.
Many of these people spend their salaries even before they collect it. Whilst others have accumulated so much debt that even their next salary won’t be enough to pay off.
Also, there are people with no formal education and they are running their business and doing well in it.
In this post, I will be sharing with you tips on how to save money, and why you should be saving money so that you can get out of the rat 🐀 race and be financially stable.
This principle of getting out of the rat race works for everyone, it doesn’t matter who you are or what kind of job you are doing, as long as you have a source of income.
To get out of the rat race and be able to save money, there is a principle that needs to be followed:
The Principle of saving money
Pay yourself first: You might be wondering, what does this mean, how do I pay myself? Well, what I’m trying to say in this sense is that, out of the salary you just received, you pay yourself from it by putting aside some money you will not touch. The amount you pay yourself depends on the value you place on yourself for your service (that is, the time and energy you spend in earning that money).
You should always pay yourself first once you collect your salary or allowance before you pay the food seller before you pay the clothes seller before you pay the shoe seller or the woman across the street. If you don’t pay yourself first, you will notice that after paying everyone else you will be left with almost nothing, so pay yourself first before anybody else. This point can’t be overemphasised
Why some people don’t practice it
The reason many people don’t practice this principle is that they never actually sat down to think about their worth. I mean, what’s the value of your time and energy you put into your work/job?
You don’t need to buy things you don’t need, cut down your expenses and stick to your basic needs.
You can walk home from work if the distance isn’t that far instead of taking a bus. Maybe you should consider drinking water instead of soda. Those little expenses you spend on that you don’t really need can actually help you save money and build wealth if you can cut them.
You can learn to do some certain things instead of spending money to get them. E.g. You can learn to cook instead of always eating in the restaurant, that way you will save more money and even eat something healthier.
You don’t have to buy what is in fashion if you can get something cheaper but also good. The point is to do away with the things that you don’t necessarily need.
Taking care of everybody else: The second reason why some of you don’t pay yourself is that you don’t know how to say no. People just know that when they ask you for money, you will send it. As much as it’s good to help people, it’s also important to remember that the only way you can really help people is to secure yourself first.
For instance, by paying yourself first, the money you save over time will be used to invest into another business that won’t require you working overtime and some of the money made out of that investment can be used to help more people. You could buy a taxi 🚕 which you will give someone to operate for you and deliver an agreed amount on a daily or weekly basis without you having to do any extra work.
Peer pressure: This is another reason why some people can’t save money. Because they see their friends buying fancy things, they also want to buy even when it’s clear they can’t afford it, so they take a loan to make sure they acquire that thing.
If you are trying to save money, before you buy anything, you should ask yourself first, one simple question, which is, can I survive without this thing. If your answer is yes, then you shouldn’t buy it. In the nearest future, you will be able to buy something much better than that.
It’s not enough to know how to make money, its much more important to know how to keep the money. It doesn’t matter how much you make if you don’t know how to save money.
And why you must practice it
Prepare for emergencies: the major reason why it’s important for you to have savings is that there will always be emergencies and you can not guarantee anyone will be willing to help you.
If you are a parent, it’s even more crucial in your part because your children are looking up to you whenever they have any problems.
When you are trying to build wealth, you should learn to be a bit selfish in your spending. As long as you know where you are going.
It’s not actually selfish to help yourself first when it comes to the money that you worked for.
As tight as things are, you will still find ways to save money on a tight budget and do away with some things you can do without, so that whatever your salary is, you can also pay yourself for working for that money. This means putting aside some money you will not touch. Pay yourself first and budget whatever you have left. This is where your creativity comes to play.
For you to be able to save money and get out of the rat race you need to create a passive income, something that will be making money for you without you doing any extra work.
I’m sure if you follow the above tips on how to save money, your financial status will see significant changes.